[00:00:03] Speaker 00: Case number 14-7129, Reuven Gilmore, individually and as the administrator of the estate of Esh Kadesh Gilmore and as natural court guardian of Plant East Elena Gilmore and Dror Gilmore at L Appellants versus Palestinian Interim Self-Government Authority, also known as Palestinian Authority at L. Mr. Yellowitz for the appellants, Mr. Berger for the appellees. [00:00:44] Speaker 04: on behalf of the plaintiffs, the Gilmore family. [00:00:47] Speaker 04: There are four things I'd like to cover this morning, time permitting. [00:00:51] Speaker 04: First of all, I want to comment on the way the conversation about whether the Palestinian Authority and the PLO have due process rights under price fits with the holdings of the district court in the Gilmore case, because I think they're very informative. [00:01:11] Speaker 04: Second, I want to talk a little bit about the specific jurisdiction question. [00:01:16] Speaker 04: Third, I want to talk about the defendant's waiver of their jurisdiction argument in this case. [00:01:22] Speaker 03: Don't you think you better start with that before you get to the jurisdiction question? [00:01:26] Speaker 04: Well, look, the waiver is very obvious because the federal rule of 12 is very clear that on your first motion, if you have a jurisdictional defense, you have to raise it on the motion. [00:01:39] Speaker 04: The defendants raise that for the individual defendants. [00:01:42] Speaker 04: They elected not to raise that for the [00:01:46] Speaker 04: institutional defendants and Judge Kessler correctly said they've been making their jurisdictional argument for 10 years for whatever reason they chose not to make it in their first motion in this case, that's a waiver. [00:02:02] Speaker 04: And then they conducted the litigation for 10 years without raising their jurisdictional defense [00:02:07] Speaker 04: And it's a very simple holding. [00:02:09] Speaker 04: It's obviously correct. [00:02:11] Speaker 04: And I don't think that they, you know, they get into this issue of was the at-home defense available under Gilmour, under Goodyear, or was it available under Daimler? [00:02:24] Speaker 03: I think you make a strong argument. [00:02:26] Speaker 03: The circuits have split on that. [00:02:27] Speaker 03: You make a strong argument, there's a waiver. [00:02:29] Speaker 04: All right. [00:02:29] Speaker 04: Now, with regard to the due process issue, I want to explain what Judge Kessler did here. [00:02:35] Speaker 04: First, she vacated the default. [00:02:38] Speaker 04: And she vacated the default primarily on the strength of a case from this court. [00:02:42] Speaker 03: Why do you process? [00:02:43] Speaker 03: You're not speaking of jurisdiction. [00:02:45] Speaker 04: No, I'm speaking about the persuasive, the reasoning of cases like Price and Prash book constructions. [00:02:54] Speaker 03: I don't understand. [00:02:55] Speaker 03: If jurisdiction is waived, why are you talking about jurisdiction? [00:02:59] Speaker 04: Well, it's more about [00:03:02] Speaker 04: Let me go right to the default then, and I'll come back to where I'm going. [00:03:11] Speaker 04: The district judge said the default was intentional. [00:03:15] Speaker 04: It was a strategic decision, number one. [00:03:18] Speaker 04: Number two, it caused severe and painful prejudice to this family, because they had to fly into the district and testify about the worst day of their life and the pain that it caused, and they'll never get that back. [00:03:29] Speaker 04: But she said, you know, we have a rule in this district that foreign sovereigns, foreign countries shouldn't be defaulted if it can be avoided at any cost. [00:03:39] Speaker 04: And she relied on a case called practical construction. [00:03:42] Speaker 04: I think the facts are very different in that case. [00:03:45] Speaker 04: But nonetheless, what she said was this entity, the PLO and the PA, they are not a sovereign nation, but the reasoning of practical construction applies here because of their attributes. [00:03:58] Speaker 04: Their attributes are sufficient for these purposes that I'm going to apply the reasoning of that case to this because they're more like a foreign government [00:04:08] Speaker 04: then they are like a private actor. [00:04:11] Speaker 03: What's the scope of review of our... What is the scope of review of binding us on this issue? [00:04:17] Speaker 04: Abuse of discretion, which is an error of law or a substantial mistake of fact. [00:04:23] Speaker 04: Here there's no question about what the facts are. [00:04:25] Speaker 04: The only question is, is the reasoning of practical instruction... Is it reasonable or not? [00:04:31] Speaker 04: Well, is it correct as a matter of law? [00:04:33] Speaker 02: But you can't pin it just to that. [00:04:35] Speaker 02: I mean, Rule 55 talks about you can vacate default for good cause, right? [00:04:41] Speaker 02: Good cause. [00:04:42] Speaker 02: That's awfully broad. [00:04:44] Speaker 02: And why isn't it appropriate for the district court to consider the international implications of a default against the PA? [00:04:56] Speaker 04: Well, there are two reasons, I think. [00:04:58] Speaker 02: The first is... Again, under an abusive discretionary standard, yeah. [00:05:01] Speaker 04: The first is, I think that if she's incorrect as a matter of law, that they're the juridical equivalent. [00:05:10] Speaker 04: The premise here that you just heard a long conversation about is that unless the PA is the juridical equivalent of the United States, unless they're a sovereign, [00:05:20] Speaker 02: They're entitled to treatment as if... I think that's a... I think you're trying to slice it too fine. [00:05:27] Speaker 02: Good cause. [00:05:29] Speaker 02: district court has discretion to set aside a default for good cause. [00:05:35] Speaker 02: She thought, the district court here thought a good cause was the international implications of putting the Palestinian authority in default. [00:05:45] Speaker 03: In other words, and that doesn't depend on Saudi Arabia. [00:05:49] Speaker 04: That's fair. [00:05:50] Speaker 04: I do want to point out [00:05:52] Speaker 04: Two things about that, and then I want to get to the other issues. [00:05:56] Speaker 04: The first is that where it suited the defendant's purpose, they wanted to be treated as if they were sovereign. [00:06:04] Speaker 04: And the district court said that's persuasive. [00:06:08] Speaker 04: Not that they are sovereign, but that the reasoning applies equally here. [00:06:12] Speaker 04: That's the first thing I want to say about that. [00:06:13] Speaker 04: The second thing I want to say about that is there are circuits, and I don't think this circuit has spoken with crystal clarity about it, but there are circuits which have said if you willfully default, if it's intentional, then that disqualifies you for good cause. [00:06:31] Speaker 04: The district judge didn't follow those cases. [00:06:34] Speaker 04: She followed cases that said, we're going to mix it all together. [00:06:37] Speaker 04: And she said, primarily, she wanted to do that because... Well, the key is what you just said. [00:06:42] Speaker 02: It's not crystal clear in this circuit. [00:06:43] Speaker 02: So how could you say that was an abuse of discretion on her part when we have no case law that says, willful default, end of inquiry? [00:06:54] Speaker 04: I think that the cases could be read that way, but I think that's a question for this panel to decide. [00:07:02] Speaker 03: Well, the rules don't say that. [00:07:03] Speaker 03: The rules say good cause. [00:07:05] Speaker 03: Fair enough. [00:07:06] Speaker 03: And it doesn't exclude a willful default. [00:07:09] Speaker 04: The rules, the case law that says it... Rule 55. [00:07:13] Speaker 04: The case law that says what I'm saying is a loss on the term good cause. [00:07:17] Speaker 04: Right, but... The rule does not say it. [00:07:19] Speaker 04: The cases say it. [00:07:20] Speaker 04: Okay. [00:07:20] Speaker 04: Well, not cases here. [00:07:23] Speaker 04: True. [00:07:23] Speaker 04: This court has not come out either way on that question. [00:07:27] Speaker 04: So that would be something that you'd have to address. [00:07:29] Speaker 04: Right. [00:07:30] Speaker 04: Now, the next thing that happened to these plaintiffs is they wanted discovery of intelligence files from the district court. [00:07:39] Speaker 04: And the defendants came and they said, well, we're entitled to state secrets. [00:07:44] Speaker 04: because we're an important governmental partner of the United States, and we want to be treated like a government for purposes of state secret privilege. [00:07:52] Speaker 04: And again, the district court said, well, look, they're not a sovereign, but the reasoning behind that applies to them. [00:07:59] Speaker 04: And so I'm not going to give you that information. [00:08:02] Speaker 04: And quite frankly, the information in those files can be extremely helpful. [00:08:07] Speaker 04: I know that because I tried the Sokolo case. [00:08:10] Speaker 03: But it's not. [00:08:10] Speaker 03: We looked at it. [00:08:12] Speaker 03: If we conclude, just as she concluded, there's nothing that would help you in this case. [00:08:22] Speaker 04: What she said, and I haven't seen the files, and I think it's profoundly unfair to ask me a question like that when I haven't seen them. [00:08:31] Speaker 00: And I'm an officer of the court. [00:08:32] Speaker 04: I could look at them under an attorney's eyes only provision. [00:08:37] Speaker 04: And it's to tie my hands and blindfold me and tell me what it says. [00:08:41] Speaker 04: It's just not fair. [00:08:43] Speaker 03: Well, the key is, in your brief, you said the real problem is you weren't allowed to argue. [00:08:48] Speaker 03: But the real key is whether the district judge should have seen it in camera. [00:08:53] Speaker 03: But isn't that appropriate that the district judge looked at it in camera? [00:08:56] Speaker 04: I don't have a problem with making a privileged determination in camera. [00:09:03] Speaker 03: OK. [00:09:04] Speaker 03: And once the district judge concluded, forget the brief that came in afterward. [00:09:08] Speaker 03: Once the district judge concluded it's irrelevant or inadmissible, then [00:09:14] Speaker 03: Why isn't that the end of the case? [00:09:15] Speaker 04: She didn't conclude that it was privilege. [00:09:17] Speaker 04: She concluded it was inadmissible. [00:09:18] Speaker 04: I said inadmissible. [00:09:19] Speaker 04: And I don't understand that wholly because a file prepared by the defendant in the ordinary course of its business operations or public operations is an admission. [00:09:32] Speaker 04: So I don't understand how that could be inadmissible. [00:09:34] Speaker 03: I don't understand, but this is intelligence material. [00:09:37] Speaker 04: Well, I haven't seen it, but the ones that I've seen that are like that, they say, you know, so-and-so did the following crimes, and those are admissions. [00:09:46] Speaker 04: And so if it says Abu Halawa murdered Gilmore, that's an admission. [00:09:52] Speaker 03: If it said, if my hand had wheels, it should be a trolley car. [00:09:55] Speaker 03: I'm sorry? [00:09:56] Speaker 03: If my hand had wheels, it should be a trolley car. [00:09:58] Speaker 03: If it did say that, you'd be in a stronger position. [00:10:01] Speaker 03: All right. [00:10:06] Speaker 04: I think that the takeaway then on that issue, and you know, if you've looked at them, you've looked at them, and I haven't. [00:10:13] Speaker 03: But the point is, is it illegitimate for the district judge to look at it as in camera? [00:10:18] Speaker 03: Once she looks at it in camera and concludes there's nothing here that helps, and it does arguably jeopardize the intelligence operations of the PA, why isn't that the end of the case? [00:10:36] Speaker 04: Look, there are things I know, there are things that I can say about a piece of evidence that the judge won't know on his or her own. [00:10:50] Speaker 04: That's my job, is to put the evidence in context and explain it, and normally I get that chance in the trial court. [00:10:58] Speaker 03: I think it's a... But you don't object to the fact that this was seen by the judge in camera. [00:11:05] Speaker 04: I mean, it happens with privilege all the time. [00:11:07] Speaker 04: Right, exactly. [00:11:09] Speaker 04: But it doesn't happen with admissibility, and that's the problem that I'm having. [00:11:14] Speaker 04: The judge can say, this is privilege because it's a communication from attorney to a client or client to an attorney or something like that. [00:11:22] Speaker 04: But to say this isn't an admission or this isn't, what she said is these are after the fact statements and so therefore they don't show prior knowledge. [00:11:32] Speaker 04: But that's not the issue here. [00:11:33] Speaker 04: The issue isn't prior knowledge. [00:11:35] Speaker 04: The issue is did a member of this 417 terror cell participate in this crime? [00:11:41] Speaker 04: And let me go to that issue. [00:11:44] Speaker 04: On the merits, remember the judge said I want to vacate the default because I want this case tried on the merits. [00:11:51] Speaker 04: The district court, when it came to summary judgment, took every piece of evidence implicating the 417 terror cell and said, I'm going to throw that piece of evidence out. [00:12:04] Speaker 04: I'm going to throw that piece of evidence out. [00:12:06] Speaker 04: And so in the end, there is no determination on the merits. [00:12:09] Speaker 01: And let me take... But I mean, the whole point of Rule 56 in summary judgment [00:12:14] Speaker 01: is to see whether there are any material issues of fact based on admissible evidence. [00:12:21] Speaker 04: Right. [00:12:22] Speaker 01: So you have to begin the inquiry by seeing what is the scope of the admissible evidence, and then after you determine that, you know, is there a case here to go to the trial? [00:12:34] Speaker 04: Right. [00:12:35] Speaker 04: And what she did here was [00:12:38] Speaker 04: was call a bunch of strikes balls in order to throw the case out. [00:12:43] Speaker 04: And let me take you through a couple of them. [00:12:46] Speaker 04: Because I think the most obvious one are the government of Israel post investigative reports. [00:12:52] Speaker 01: In each of these is governed under, our review is governed under abuse of discretion. [00:12:57] Speaker 04: Correct. [00:12:58] Speaker 04: Abuse of discretion meaning error of law or substantial error of fact. [00:13:03] Speaker 04: So take the government of Israel, of course. [00:13:07] Speaker 04: I think these are our best piece of evidence. [00:13:10] Speaker 04: They're crystal clear saying Force 17 committed this crime, and indeed Abu Halala, who we targeted and killed, committed this crime, participated along with others. [00:13:22] Speaker 04: And that's a, there's no question. [00:13:25] Speaker 03: What kind of document is that? [00:13:26] Speaker 04: That's a government report. [00:13:28] Speaker 04: That's a, that's a report by the. [00:13:30] Speaker 04: And how did the district judge describe that report? [00:13:34] Speaker 04: She called it a web page, which is, which I think what that does is tips her hand about, about maybe what she thinks about [00:13:43] Speaker 04: a sister sovereign. [00:13:45] Speaker 04: You know, if it was a... You mean she was anti-Israeli. [00:13:48] Speaker 03: Is that your point? [00:13:49] Speaker 04: I'm not saying that. [00:13:50] Speaker 04: I'm saying that she approached a statement by the government of Israel with inherent skepticism. [00:13:58] Speaker 03: And that's clear from her opinion in which she says... She probably thought of it as analogous to statements of the United States government. [00:14:10] Speaker 04: Well, [00:14:12] Speaker 04: Here's what the law is on that. [00:14:14] Speaker 04: We may not like all the statements that our government puts out. [00:14:17] Speaker 03: But there are statements and statements, and some statements can be perceived as public relations more than official inquiries based on careful factual analysis. [00:14:31] Speaker 04: I think that if the United States government put out a report saying, we have targeted and killed the following terrorists, and here's the things that he did, nobody would say that's a press release put out for public relations purposes. [00:14:43] Speaker 02: And what the district does is fall within the public records exception of the rule against hearsay. [00:14:48] Speaker 02: Right. [00:14:49] Speaker 02: Just because it comes from the government? [00:14:50] Speaker 04: No. [00:14:51] Speaker 04: It has to follow a lawful inquiry, and the opponent [00:14:56] Speaker 04: That's a follow off. [00:14:58] Speaker 02: Isn't that what the district court's problem was with these statements? [00:15:02] Speaker 02: That there was no evidence showing where they came from, what they were the basis of. [00:15:08] Speaker 02: It was just a statement, a conclusory statement. [00:15:10] Speaker 04: It's a little more nuanced than that. [00:15:12] Speaker 04: What she said was, because there was evidence, which was a report from Evitar, an expert, Alon Evitar, who said, I'm familiar with the process for producing statements like this. [00:15:28] Speaker 04: It's reliable. [00:15:29] Speaker 04: This is reliable. [00:15:30] Speaker 04: And she said, [00:15:32] Speaker 02: And she said statements like this, but not this statement. [00:15:36] Speaker 04: Fair enough. [00:15:37] Speaker 04: But but this, I mean, we do that all we have. [00:15:40] Speaker 04: We do that all the time with somebody will say again, if if if the United States government put out a statement saying we targeted the following terrorists and here's why [00:15:51] Speaker 04: And somebody came on a Rule 104 hearing and said, statements like this are reliable. [00:15:58] Speaker 04: The burden would then shift to the opponent to say that circumstances show that it's unreliable. [00:16:06] Speaker 04: And that's in Rule 8038. [00:16:09] Speaker 04: And in fact, [00:16:10] Speaker 04: Rule 8038 was amended in 2014 to make it crystal clear that the opponent has the burden of showing that the statement is unreliable. [00:16:19] Speaker 03: You know, I thought you could quite cleverly put the issue as either it's a question of fact or it's a question of law. [00:16:26] Speaker 03: Isn't it really something in between? [00:16:30] Speaker 04: Well, mixed questions are also reviewed and developed. [00:16:33] Speaker 03: And almost policy issues here, too. [00:16:36] Speaker 03: I think that on this issue... In other words, the abuse of discretion standard seems to be the most difficult problem we're having. [00:16:44] Speaker 03: even if we concluded that if we were sitting as a district judge, we would have come out differently. [00:16:50] Speaker 03: That isn't enough for us to reverse a district judge. [00:16:53] Speaker 04: The application of an erroneous standard is enough to send it back to the district court. [00:17:01] Speaker 04: The erroneous standard being? [00:17:02] Speaker 04: 803A says it's up to the opponent to show that it's unreliable. [00:17:06] Speaker 04: That's a 2014 amendment to the rule to make that crystal clear. [00:17:11] Speaker 04: And here the district court said, I have nothing showing it's reliable. [00:17:16] Speaker 04: So she erroneously, she applied the wrong standard. [00:17:20] Speaker 01: How does that show that she applied the wrong standard? [00:17:23] Speaker 01: I mean, she didn't say that I put the burden on the plaintiffs. [00:17:28] Speaker 01: hear the proponents of the evidence. [00:17:30] Speaker 01: She just said, I found that I don't have anything here to show that it's reliable. [00:17:36] Speaker 01: You're asking us to make a leap to say that she, the district court, applied the wrong legal standard. [00:17:44] Speaker 04: I think what she said, it's not a leap based on the language of the district court's opinion. [00:17:51] Speaker 04: The language of the district court's opinion, and I know you've looked at it and I urge you to look at it again, [00:17:57] Speaker 04: is I see nothing to show me that it's reliable. [00:18:01] Speaker 04: And I discount the Evitar Declaration because it's not granular enough, which is the point that Judge Griffith made. [00:18:10] Speaker 04: And my response to that is, [00:18:13] Speaker 04: is if you're a district court and you're going to weigh facts, and on one side you have nothing, and on the other side you say, well, that's not enough, then what you've done is you've put the burden on the proponent rather than the opponent. [00:18:27] Speaker 01: Will the opponent, by definition, challenge [00:18:33] Speaker 01: the piece of evidence or else, I mean, you know, that's how the issue got joined. [00:18:40] Speaker 04: The opponent has to come forward with evidence. [00:18:43] Speaker 01: I'm an old criminal defense attorney, and I almost never put on any evidence, especially my client, when I tried a case, but that didn't mean that I wasn't challenging the government's case. [00:18:56] Speaker 01: I don't understand your argument. [00:18:58] Speaker 04: Right, and your client had a presumption of innocence. [00:19:00] Speaker 04: And in a lot of rules, like for example, I'm trying to remember which one, I think the prior and consistent statement, a criminal case has heightened protections. [00:19:12] Speaker 04: And so the burden isn't on the defendants, on the government. [00:19:15] Speaker 04: But on this particular rule for a government report, once you have a government report... Don't you think, as judge, [00:19:23] Speaker 03: Wilkins points out her statement could be interpreted either way. [00:19:26] Speaker 04: No, no, I, looking, I mean, I was looking at it last night. [00:19:31] Speaker 04: I was thinking about this issue, and I know that you all have read it. [00:19:36] Speaker 03: If it's ambiguous. [00:19:38] Speaker 04: I don't think it's ambiguous at all. [00:19:39] Speaker 03: If it were ambiguous, have we concluded it's ambiguous? [00:19:42] Speaker 04: I think if you concluded it was ambiguous... Well, I don't see how you conclude it. [00:19:47] Speaker 03: I really don't see how you conclude it. [00:19:49] Speaker 04: If we conclude it's ambiguous, then what? [00:19:51] Speaker 04: Then I think you have to send it back so that she can apply the correct standard. [00:19:57] Speaker 03: No, and we would then give her the benefit of the doubt as to the appropriate interpretation. [00:20:01] Speaker 03: That's what we always do for district judges. [00:20:03] Speaker 03: On a question of law... This is not quite just a question of law, is it? [00:20:08] Speaker 04: Well, I think that who the burden is on is a question of law. [00:20:16] Speaker 04: And I particularly want to point the court [00:20:24] Speaker 04: to pages 877 to 878 of the Joint Appendix, because that's really where she says, Evitar isn't enough, and she doesn't have anything on the other side. [00:20:40] Speaker 04: make one point about specific jurisdiction, if I may, which is the Gilmore case and the Kleinman case. [00:20:49] Speaker 03: Why are you making an argument on specific jurisdiction? [00:20:51] Speaker 03: You want to raise that you think that there's no waiver of that and so that's before us? [00:20:56] Speaker 03: Well, I have belt and suspenders, Your Honor. [00:20:59] Speaker 03: If you'll hear me on it, I'll... Okay. [00:21:01] Speaker 03: In other words, you're making this point because you think [00:21:05] Speaker 03: The waiver might fail. [00:21:08] Speaker 04: Make it in 30 seconds. [00:21:10] Speaker 02: Go ahead. [00:21:12] Speaker 02: Make it in 30 seconds. [00:21:13] Speaker 04: Go ahead. [00:21:13] Speaker 04: All right. [00:21:15] Speaker 04: Two things, very quickly. [00:21:17] Speaker 04: Number one, Gilmore and Kleiman took place in 2000 to 2004. [00:21:23] Speaker 04: It's a different factual scenario, and I think that that's a very important thing. [00:21:29] Speaker 04: Point number two, it's not just me who thinks you look at the national interest. [00:21:35] Speaker 04: That's what the Third Circuit has said. [00:21:37] Speaker 04: That's what the Sixth Circuit has said. [00:21:39] Speaker 04: That's what the Supreme Court says in all of the 14th Amendment cases. [00:21:45] Speaker 02: OK, any further questions? [00:21:45] Speaker 02: OK, thank you. [00:21:46] Speaker 02: We have you very well. [00:21:46] Speaker 02: OK, thank you. [00:21:47] Speaker 02: We'll give you a minute back for rebuttal. [00:21:50] Speaker 02: Thank you. [00:21:54] Speaker 05: the court. [00:21:55] Speaker 05: I'd like to address four issues. [00:21:56] Speaker 05: I'll take them up, of course, in whatever order the court wants, although I'd like the invitation to walk into the lion's den and deal with Judge Silverman's point about waiver. [00:22:04] Speaker 05: But I want to talk about waiver. [00:22:06] Speaker 05: I'd like to talk about vacating the default [00:22:09] Speaker 05: the in-camera review of the general intelligence service files, and then the long list of evidentiary rulings, only one of which really, Mr. Yalowitz singled out as his best case, even though I think it's probably his worst. [00:22:23] Speaker 05: But let me deal with waiver, which is [00:22:27] Speaker 05: What the appellant says is it's a slam dunk on a waiver because we didn't raise it in our first motion to dismiss. [00:22:33] Speaker 05: And as a matter of law, that's incorrect for the reasons really we were talking about in Livna and Safra for reasons about the Price case. [00:22:40] Speaker 05: What Price says is when, as was the case here, when you raise sovereign immunity, [00:22:45] Speaker 05: We raised it as our first motion, lost big time because we're not sovereign. [00:22:50] Speaker 05: But when you raise sovereign immunity, what Price says is you're challenging both subject matter jurisdiction and personal jurisdiction. [00:22:56] Speaker 05: So as a matter of law, a sovereign immunity claim is challenging both subject matter jurisdiction and personal jurisdiction. [00:23:04] Speaker 05: That's in the Price case. [00:23:05] Speaker 05: That whole thing can be found at [00:23:07] Speaker 05: 294F3 at page 89. [00:23:10] Speaker 05: And then Mr. Yalowitz's favorite case, Practical Concepts, which is the case about the bake-hitting default at 811F2 at 1544 to 1545. [00:23:22] Speaker 05: What the court said there was, yes, a sovereign immunity challenge is a challenge to both [00:23:27] Speaker 05: personal jurisdiction and subject matter jurisdiction. [00:23:31] Speaker 05: So it's an awfully harsh consequence to say that a substantial jurisdictional challenge, which we just spent the entire last argument talking about, was waived because of a nomenclature issue, because the motion said sovereign immunity and didn't articulate the words additionally personally. [00:23:46] Speaker 03: I'm not sure primary argument was [00:23:48] Speaker 03: The Supreme Court law wasn't clear at the time. [00:23:51] Speaker 02: Is this an argument you made in your briefs? [00:23:53] Speaker 02: I don't recall. [00:23:54] Speaker 05: And I'm glad you raised that, because I certainly anticipated the court would ask that question. [00:23:59] Speaker 05: Wait a minute, which question? [00:24:00] Speaker 03: My question or his question? [00:24:01] Speaker 03: I'm happy to answer both of them. [00:24:03] Speaker 03: Go answer who's first. [00:24:05] Speaker 03: No, wait a minute. [00:24:06] Speaker 03: Maybe they're both the same question. [00:24:08] Speaker 03: This is a different argument than you made in the brief, right? [00:24:12] Speaker 05: It's an additional argument because it was raised for the first time in his reply, the Rule 12-H argument. [00:24:16] Speaker 05: The district court had two grounds for its waiver decision. [00:24:19] Speaker 05: The fundamental one was the Goodyear versus Dynmore point that you're talking about. [00:24:23] Speaker 05: We raised that. [00:24:24] Speaker 05: We said, look, it would have been futile from day one because the at-home standard hadn't been articulated. [00:24:29] Speaker 05: That's the argument we made in our brief. [00:24:31] Speaker 05: In their reply, in opposition to an alternative ground for affirmance, which I get to address for the first time here in oral argument, they say, you don't even need to reach that one because they messed up under Rule 12H and didn't assert personal jurisdiction. [00:24:47] Speaker 05: We just thought this would be an intriguing issue. [00:24:49] Speaker 05: The court wanted to know. [00:24:50] Speaker 05: And so what I found was that, indeed, this court's addressed this very odd point, that when you have an alternative ground for affirmance, [00:24:58] Speaker 05: and it's opposed on a different basis for the first time in a reply brief, because we don't get to respond on that basis, is it germane to raise it at oral argument on the Crocker case out of this Court, 49F3, pages 740 to 41 says, yeah, because when you're raising an alternative ground for affirmance, it doesn't work the same way as briefing of other issues. [00:25:19] Speaker 05: But yes, Judge Sullivan, you're correct that our primary argument in our red brief was that [00:25:25] Speaker 05: The reason why it wasn't waived is that the basis on which we could contest it today didn't exist back then. [00:25:32] Speaker 03: And that's arguable given the Goodyear case, right? [00:25:36] Speaker 05: I don't think so. [00:25:36] Speaker 05: I think Sackalo nailed it just as the district court did here, and Sackalo adopted that in saying, [00:25:42] Speaker 05: Everybody, in retrospect, sees Goodyear with great clarity, but unfortunately, as the database of district court decisions shows, people didn't get it. [00:25:52] Speaker 05: The whole reason why Daimler came about was the Supreme Court thought, nobody's getting what we meant to say. [00:25:56] Speaker 03: Well, when the Supreme Court opinion is confusing and it's not clear, then it's important for counsel to make the point, isn't it? [00:26:06] Speaker 03: It's one thing if the Supreme Court opinion had been contrary to Daimler, but it wasn't. [00:26:11] Speaker 05: Well, it depends, I suppose, on your appetite for being slapped down for futility. [00:26:15] Speaker 05: What had happened was they had litigated and lost this issue repeatedly. [00:26:18] Speaker 03: Is that a problem for you, being slapped down for futility? [00:26:22] Speaker 05: Well, not me personally, but I can only speak for those who were litigating at the time. [00:26:26] Speaker 05: The fact is that as a matter of law, [00:26:28] Speaker 05: This has been the subject of three successive Second Circuit decisions, Gucci, Brown versus Lockheed, Saklo, which is – I'll turn it around the other way. [00:26:37] Speaker 05: If the Second Circuit couldn't see it coming that this is what Goodyear meant, then why should ordinary mortals see it coming as this is what – You're not even – you're not better than the Second Circuit? [00:26:47] Speaker 05: I'll leave that to you, Your Honor. [00:26:49] Speaker 05: Why don't you go to the other issues in the case? [00:26:52] Speaker 05: Certainly, Your Honor. [00:26:52] Speaker 05: So let me deal with them in reverse order. [00:26:54] Speaker 05: If he says, well, let me actually deal with in-camera review. [00:26:57] Speaker 05: This is an easy one. [00:26:58] Speaker 05: They asked for it. [00:26:59] Speaker 05: They asked for it. [00:27:00] Speaker 05: They got it. [00:27:01] Speaker 05: It's hard to stand here and say it's an abuse of discretion for the district court to have conducted an in-camera review when they said, if you don't want to... That's why they didn't deny. [00:27:09] Speaker 03: They never claimed the in-camera review was a problem. [00:27:14] Speaker 03: Their concern is what happened subsequently. [00:27:18] Speaker 05: They don't like the district court's application of the aerospacial factors and what they've done in what I have to admire, a feat of gymnastics when I see it, to try to turn that into re-arguing the jurisdictional question and talk about juridical equality. [00:27:34] Speaker 05: That had nothing to do with what the district judge said. [00:27:36] Speaker 05: The district judge said, I'm applying the aerospacial analysis. [00:27:40] Speaker 05: It applies to foreign litigants. [00:27:41] Speaker 05: It doesn't matter whether you're sovereign or not. [00:27:43] Speaker 05: I'm applying a multi-factor analysis. [00:27:45] Speaker 05: Comedy is only one of them, but really it's the international context. [00:27:49] Speaker 05: Again, as your honor said, each of your honors, as a district judge, might have called it the other way. [00:27:54] Speaker 05: It doesn't matter for purposes of the abuse of discretion standard. [00:27:58] Speaker 05: It was in the realm of reason. [00:27:59] Speaker 05: It was the right decision to make. [00:28:01] Speaker 03: What about the fact that the district judge allowed [00:28:05] Speaker 03: the defendant to write a brief in support of the inadmissibility of the matter that was in the end camera, but didn't allow any response. [00:28:19] Speaker 05: Was that troubling? [00:28:20] Speaker 05: No, for the following reason, which is the district court, and this is, I think, the broad view on abuse and discretion, was endlessly patient with both sides. [00:28:28] Speaker 05: First, in reversing default, then with the plaintiff. [00:28:32] Speaker 05: She allowed the issue of the GIS files to be litigated three separate times. [00:28:36] Speaker 05: First, in the scenario that Your Honor's talking about. [00:28:39] Speaker 05: Then she entertained a motion to unseal the records, which she treated as a motion for reconsideration. [00:28:45] Speaker 05: Then she entertained a third motion for reconsideration. [00:28:49] Speaker 05: By that point, the public record was full. [00:28:51] Speaker 05: There was public briefing on this issue. [00:28:53] Speaker 05: The district court had already explained her findings after in-camera review. [00:28:57] Speaker 03: But she allowed the defendant to write a brief specifically dealing with [00:29:05] Speaker 03: the in-camera material but didn't allow the other side to run. [00:29:12] Speaker 05: What she did was cured that to the extent that was an error at all, and I would not say it is because the district court has discretion, by fully informing the plaintiffs of what the arguments were. [00:29:22] Speaker 05: There was a public declaration, actually two of them, that explained the nature of the files and why they were sensitive and why they were privileged. [00:29:30] Speaker 05: She explained in her decision. [00:29:31] Speaker 03: What about the inadmissibility? [00:29:33] Speaker 03: You know, counsel says, look, what a judge might think is inadmissible on first reading might be, he might, he or she might be convinced by counsel. [00:29:44] Speaker 03: who focuses on the issue somewhat differently. [00:29:47] Speaker 05: Well, I think the district court here listened endlessly to argument on this subject. [00:29:51] Speaker 05: It is the rare district court that will let the same argument be made three different times. [00:29:57] Speaker 05: She heard them out fully on this issue. [00:29:59] Speaker 05: She allowed them to submit a separate declaration. [00:30:02] Speaker 03: Wait a minute, but they didn't know what was in the in-camera material. [00:30:05] Speaker 05: Well, that would be undoing the old purpose of in-camera review. [00:30:08] Speaker 05: She characterized what they were in terms of what they were, the type of file. [00:30:13] Speaker 05: There was a public declaration from an official of the General Intelligence Service explaining it, explaining that this was raw intelligence material. [00:30:21] Speaker 05: Again, if Your Honor were sitting in the district court, perhaps you would have held it differently, but the abuse of discretion standard, and this is a good segue for me to get to default, recognizes that we ask the district judges to roll up their sleeves, to do the hard work, to manage the litigation, and just because I might have done it differently or Your Honor might have done it differently, doesn't matter for abuse of discretion. [00:30:43] Speaker 05: Their biggest problem in this case is the abuse of discretion standard. [00:30:46] Speaker 05: Absolutely. [00:30:47] Speaker 05: Every issue about which they complain is an abuse of discretion, standard review. [00:30:53] Speaker 02: So that, I guess, gets me to... I don't understand why the district court felt the need to have ex parte legal argument. [00:31:01] Speaker 02: Why? [00:31:02] Speaker 05: I think the district court believed that it was going to assist her review of understanding the nature of these documents. [00:31:11] Speaker 05: But she recognized the complaints. [00:31:14] Speaker 02: At that point, why doesn't it just throw, why don't you let the other side get involved as well? [00:31:21] Speaker 02: If you're going to ask for argument about what these things mean, [00:31:25] Speaker 02: If the court itself can't determine what they mean and there's implication, in our system, both sides get involved, right? [00:31:34] Speaker 02: You don't just let one side tell you what it means. [00:31:37] Speaker 05: Oh, I think this court has repeatedly seen where both in-camera documents and in-camera argumentative submissions, whether they're affidavits or whether they're briefs, they're regularly received in the case of classified documents. [00:31:50] Speaker 05: And indeed, I was listening to a recording of [00:31:54] Speaker 05: an argument for this court. [00:31:56] Speaker 05: The court went into an executive session to hear arguments over the classified record. [00:32:00] Speaker 05: It's done regularly in recognition that there may need to be classified advocacy or ex parte advocacy. [00:32:07] Speaker 03: When we go into the session where both lawyers are allowed to argue, [00:32:12] Speaker 03: Judge Griffiths is very concerned at this procedural, and I was asking the question too, whereby only one side gets the chance to argue. [00:32:21] Speaker 03: Now, I think your best response to that is the real key is the in-camera review. [00:32:28] Speaker 03: And when the district judge concludes that the in-camera review [00:32:33] Speaker 03: indicates to her that there's nothing in this material that's helpful to the plaintiff. [00:32:39] Speaker 03: The oral argument doesn't add much to it. [00:32:42] Speaker 03: It's not necessary. [00:32:43] Speaker 05: I'll adopt that, but I may supplement it by saying that to the extent it was an error, she cured it, which she said is okay. [00:32:50] Speaker 05: Now I'm putting out an opinion, I'm explaining what I saw, I'm explaining the arguments I heard, and I am going to treat your motion to unseal as a request for me to reconsider. [00:33:00] Speaker 05: And now that you know what I looked at, and now that you know my thinking process, you may advocate in open session and I'll hear you. [00:33:07] Speaker 03: That's a good point. [00:33:10] Speaker 05: Now, what about your letter? [00:33:11] Speaker 05: So there's two other points, which is, number one, vacating the default. [00:33:15] Speaker 05: This circuit has a long-standing policy of favoring adjudication on the merits. [00:33:19] Speaker 05: Again, the district court was the person on the scene. [00:33:21] Speaker 05: The district court said, look, there's a lot of things here I don't like, but it's up to me to craft a tailor-made solution to the problem. [00:33:28] Speaker 05: I have given a broad remit under Rule 55C for good cause. [00:33:33] Speaker 05: I can consider lots of factors. [00:33:35] Speaker 02: One of the things that all of this court's cases stand for in the default... You know, maybe you can use lots of factors, but in Kegel, we identify three factors, right? [00:33:45] Speaker 02: We've sort of decided what good cause means, and it's three factors, and her analysis was not limited to those three factors. [00:33:53] Speaker 02: What do you say to that? [00:33:55] Speaker 05: Well, because rule 55c, good cause in this context, was picked up in the practical concepts case by this court as saying that I was standing Kiegel, which predates practical concepts, that the international impact [00:34:10] Speaker 05: influences the public interest, which is part of the good cause equation. [00:34:14] Speaker 05: And clearly what the district court did was it didn't let my clients get off scot-free. [00:34:19] Speaker 05: Look, this is very serious, but on the bottom line is we still favor merits adjudication rather than [00:34:26] Speaker 05: defaulting on the merits. [00:34:27] Speaker 05: And if there's a case that proves the wisdom of the policy, it's this one. [00:34:31] Speaker 05: When given a chance to litigate the case on the merits, the defendants won this case. [00:34:35] Speaker 05: This is a case where the plaintiffs don't like the fact that they lost on the merits. [00:34:39] Speaker 05: And they say, OK, rewind the tape. [00:34:41] Speaker 05: Let's pretend that you didn't win on the merits. [00:34:43] Speaker 05: Let me win by default. [00:34:44] Speaker 05: And that flies right in the teeth of this circuit's preference for merits adjudication. [00:34:50] Speaker 05: So let me get down to the balls and strikes. [00:34:52] Speaker 05: I'm not sure I would have said that the district court called a bunch of balls strikes in order to throw the case out. [00:34:59] Speaker 05: I think that's quite unfair to the district court. [00:35:01] Speaker 05: I think what the district court did was engage in incredibly painstaking and granular application of the hearsay rules despite the almost impunity of the plaintiffs after getting a year-long extension to oppose summary judgment. [00:35:13] Speaker 05: They filed this dismissive nine-page opposition summary judgment and a bunch of documents and basically said to the district court, you figure it out. [00:35:23] Speaker 05: District court commented on that, said the district court didn't like that. [00:35:26] Speaker 05: The district court nonetheless very carefully weighed all of the arguments that the plaintiffs had made. [00:35:32] Speaker 05: And only one of them do they single out as their best case. [00:35:35] Speaker 05: It's a clear case. [00:35:36] Speaker 05: These were press releases. [00:35:37] Speaker 05: They were accurately described by the district court as press releases, press releases about who was guilty or not guilty of certain terrorist events. [00:35:47] Speaker 05: These are Ministry of Foreign Affairs press releases. [00:35:49] Speaker 05: I have the greatest respect for the Israeli Ministry of Foreign Affairs, just as I do for the U.S. [00:35:54] Speaker 05: State Department, but they don't conduct criminal investigations. [00:35:57] Speaker 02: Absolutely, Your Honor. [00:35:58] Speaker 05: I love the statement of interest in the Sakhalin case, one of my favorite pieces of reading. [00:36:04] Speaker 05: The fact is that neither the State Department nor the Ministry of Foreign Affairs is a police agency. [00:36:10] Speaker 05: They don't conduct investigations into what was the key issue here. [00:36:14] Speaker 05: Who was the shooter? [00:36:16] Speaker 05: You wouldn't expect the Ministry of Foreign Affairs to have done it, and that's why the District Court flunked their argument on the public records exception, saying the burden is on you on the first two elements. [00:36:26] Speaker 05: Are there findings of fact? [00:36:28] Speaker 05: No, it's a press release. [00:36:29] Speaker 05: Does it contain findings of fact? [00:36:31] Speaker 05: Does it show your legal authority or duty to conduct the investigation? [00:36:35] Speaker 05: No. [00:36:35] Speaker 05: Not only did it not show it, it wouldn't – it's not intuitively within the scope of the Foreign Affairs Ministry. [00:36:40] Speaker 05: That means that the district court acted well within its discretion in excluding those press releases. [00:36:47] Speaker 05: If that's their best argument, you can imagine what I would say about the rest. [00:36:50] Speaker 05: The district court committed no abuse of discretion. [00:36:53] Speaker 05: The judgment of the district court should be affirmed. [00:36:55] Speaker 05: Thank you very much. [00:36:56] Speaker 02: Great. [00:36:56] Speaker 02: Thank you very much. [00:36:59] Speaker 02: Give me back a minute. [00:37:01] Speaker 04: two points. [00:37:04] Speaker 04: First of all, when you're appealing, when you're the appellee and you're showing up saying, I have a problem with the district court's jurisdictional decision, you address that jurisdictional decision, you don't sandbag the court. [00:37:22] Speaker 04: other side with with arguments that you pop up that oral argument with that that's that's argument about they actually did the judge was wrong because they actually did raise jurisdiction in an oblique way because it because it was raised implicitly with [00:37:38] Speaker 03: The substantive motion is dismissed. [00:37:43] Speaker 03: Their new argument is a tactical marriage. [00:37:45] Speaker 03: But he said he got that from your reply brief. [00:37:48] Speaker 04: Well, where he should have gotten that was from Judge Kessler's opinion, which said that they waived it by not raising it in the first place. [00:37:55] Speaker 03: What about what you were opening up in your reply brief? [00:37:58] Speaker 04: All I did was say Judge Kessler was right in her opinion. [00:38:01] Speaker 04: So that was something they obviously should have anticipated. [00:38:04] Speaker 04: I didn't come up with that on my own. [00:38:07] Speaker 04: Second thing, this idea that the State Department report or Ministry of Foreign Affairs report doesn't fit within 8038 is foreclosed by this court's decision in Korean Airlines, which was a UN report. [00:38:26] Speaker 04: and by the Second Circuit's decision in Citibank, which said State Department reports apply. [00:38:33] Speaker 04: My argument was she improperly shifted the burden, and Mr. Berger was silent about that. [00:38:39] Speaker 04: He didn't say anything about the burden. [00:38:41] Speaker 04: And I urged the Court to go back and look at the way the District Court [00:38:46] Speaker 04: reviewed, applied this law, which is a new law. [00:38:50] Speaker 04: And it's not shameful that she missed it in the context of this case, but it is a new amendment to the rule. [00:38:59] Speaker 04: And because I didn't have time to go through the confessions and the prior and consistent statements doesn't mean that she was right. [00:39:08] Speaker 04: She was not correct on those things. [00:39:11] Speaker 04: And if you have some evidence that's [00:39:14] Speaker 04: case in chief evidence, even if there's other evidence that's impeachment evidence, all those things go to the jury. [00:39:20] Speaker 04: You don't say, well, you have no affirmative case. [00:39:24] Speaker 02: I think we have your argument. [00:39:25] Speaker 02: Any questions? [00:39:26] Speaker 02: Thank you. [00:39:26] Speaker 02: Thank you very much. [00:39:27] Speaker 02: The case is submitted.