Last Document Filed16 Jun 2017 08:40
June 13, 2017
Via ECF
Catherine O’Hagan Wolfe
United States Court of Appeals for the Second Circuit
Thurgood Marshall United States Courthouse
40 Foley Square
New York, NY 10007
Re: Petersen Energía Inversora, S.A.U. v. Argentine Republic,
Nos. 16-3303-cv(L) & 16-3304(con)
Dear Ms. O’Hagan Wolfe:
We write in response to YPF S.A.’s June 12 letter citing Bolivarian Republic of
Venezuela v. Helmerich & Payne International Drilling Co., 137 S. Ct. 1312 (2017).
Helmerich has little bearing here. Plaintiffs in this case did not advance a “nonfrivolous
argument” standard for assessing the applicability of the commercial-activities exception. Nor
did the district court adopt that standard. Rather, it acknowledged that the FSIA requires it to
resolve factual disputes to the extent necessary to determine jurisdiction. See SPA-11-12.
Helmerich involved the FSIA’s expropriation exception, which requires a “valid claim
that ‘property’ has been ‘taken in violation of international law.’” 137 S. Ct. at 1318 (emphasis
added). The Supreme Court noted, in the context of that exception, that “merits and jurisdiction”
may become “intertwined” because the plaintiff must demonstrate an international-law violation
as part of its jurisdictional showing. Id. at 1319. But the commercial-activities exception does
not require a similar merits showing. Whether an action is “based upon” commercial activity is
assessed by reference to the nature of plaintiffs’ claims — i.e., the “gravamen of the complaint.”
OBB Personenverkehr AG v. Sachs, 136 S. Ct. 390, 395 (2015).
Nothing in Helmerich casts doubt on the district court’s straightforward FSIA analysis.
The gravamen of plaintiffs’ claim is that defendants breached contractual obligations they
entered into while raising billions of dollars in capital in the United States, facts no party
disputes. As this Court stated in Weltover, and the Supreme Court unanimously affirmed,
Catherine O’Hagan Wolfe
June 13, 2017
Page 2
“[o]nce a sovereign enters the marketplace as a commercial actor, it ‘should be subject to all the
rules of the marketplace.’” Weltover, Inc. v. Republic of Argentina, 941 F.2d 145, 151 (2d Cir.
1991), aff’d, 504 U.S. 607, 614, 617 (1992).
In pointing to supposed “conflict[s]” that would explain why defendants breached their
commercial obligations, Letter at 2, YPF proposes an inquiry the FSIA expressly forbids.
See 28 U.S.C. § 1603(d) (commercial activity assessed on the basis of its “nature,” not its
“purpose”). Because Argentina acted commercially in raising capital and forming a commercial
contract, “the subsequent breach of contract cannot be cloaked in immunity.” Weltover, 941
F.2d at 151.
Respectfully submitted,
/s/ Michael
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