GATA (Gold Anti-trust Action)Lawsuit... Page 9 (Final Page)
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V. OTHER DEFENSES SPECIFIC TO CERTAIN DEFENDANTS
ARE WITHOUT MERIT, CORRECTABLE, OR BOTH.
A. This Action Is Not Cognizable under the Federal Tort Claims Act.
The attempt by the DOJ to remove Mr. Greenspan from the case by making a certification under 28 U.S.C. s. 2679(d)(1) and invoking the Federal Tort Claims Act is frivolous. The plaintiff does not and cannot make a claim under the FTCA against Mr. Greenspan. Its provisions, including s. 2679 as well as 28 U.S.C. 1346(b), do not apply to any claim "based upon the exercise or performance or failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion is abused." 28 U.S.C. s. 2680(a). Nor do they apply to any claim "for damages caused by the fiscal operations of the Treasury or by regulation of the monetary system." 28 U.S.C. s. 2680(i). And even if the FTCA did apply, it is not the exclusive remedy for a constitutional tort. 28 U.S.C. s. 2679(b)(2). Indeed, except for a few intentional torts relating to violations of the Fourth Amendment (28 U.S.C. s. 2680(h)), the law of the place doctrine generally prevents constitutional torts from being asserted under the FTCA. Franco de Jerez v. Burgos, 947 F.2d 527, 528-529 (CA1 1991), and cases cited.
B. Service on the BIS Satisfies the Hague Convention.
The BIS argues that it was not properly served under the Hague Convention (658 U.N.T.S. 163) because service was made under Article 10 allowing service by mail rather than under Article 5, which would require service by the designated Swiss cantonal authority for Basle of a German translation of the complaint. As the BIS correctly points out, Switzerland accepted the Hague Convention subject to a reservation under Article 21 objecting to use "in its territory" of methods of service allowed under Article 10. The BIS does not allege any prejudice or harm arising from receiving a complaint in its principal working language, nor does it challenge jurisdiction on constitutional or due process grounds. Its pettifogging effort to inflict unnecessary translation expense on the plaintiff rests on the assumption that its headquarters in Basle should be considered Swiss territory for purposes of the Hague Convention.
This assumption is mistaken. Switzerland has granted the BIS a quasi-sovereign status under the agreement between the Swiss Federal Council and the BIS relating to the Bank's legal status in Switzerland (BIS.A. Ex. H). Articles 1 and 2, respectively, recognize the BIS as an "international legal personality" and an "international organization." Article 3, paragraph 1, provides that its premises "shall be inviolable," and continues: "No agent of the Swiss public authorities may enter therein without the express consent of the Bank." This provision suggests that a Swiss cantonal authority cannot even serve the Bank without its permission. Paragraph 3 grants the BIS "police power over its premises." Article 24 contains a disclaimer by Switzerland of "any international responsibility for acts or omissions of the Bank" or its officials.
As a result of these provisions, Switzerland has waived any interest it that might have had under the Hague Convention in how legal process is served on the BIS, which is neither a corporation organized under Swiss law nor a citizen of Switzerland. Indeed, as a general matter, service by mail on the BIS appears less intrusive both to its special legal status in Switzerland and to Switzerland's own sovereignty than service in hand by a Swiss official.
C. If Required, Any Defects in Service on Messrs. Summers or Greenspan Are Correctable.
In compliance with LR 7.1(a)(2), the plaintiff by letter dated March 5, 2001, advised the Assistant U.S. Attorney as follows:
Because the complaint contains a request for injunctive relief running against the Secretary of the Treasury, Mr. Summers was named in his official capacity. I did not mean by this to exclude his individual liability, but rather to indicated that he was being sued both individually and in his official capacity: individually on account of his role in the damages suffered by me with respect to my BIS shares; and in his official capacity to enjoin him and his successors, "acting through the Exchange Stabilization Fund or otherwise, from intervening in the gold market, directly or indirectly, for the purpose of affecting or with intent to affect gold prices" (request (1)).
I now recognize that my manner of serving Mr. Summers may have inadvertently caused some confusion on this point since I did not, as I probably should have, request a return receipt for my service on him by certified mail. As I read the new Rule 4(i)(2), service on a U.S. official sued in an individual capacity, whether or not sued also in an official capacity, must be made under Rule 4(e). In this case, Rule 4(e)(1) permitted service on Mr. Summers under the Massachusetts long arm statute, which allows for service by mail in substantially the same manner as new Rule 4(i)(1) requires for service on U.S. officials sued only in an official capacity. However, the Massachusetts statute does require a return receipt which Rule 4(i)(1) does not. Accordingly, Mr. Summers may have a technically correct argument that personal service on him was defective. If he has been prejudiced or misled by the manner of original service, as an alternative to serving him again, I am willing to assent to whatever additional time he requires to respond in his personal capacity.
In subsequent exchanges, the DOJ indicated that it did not represent Mr. Summers individually, and that it would not assist the plaintiff to effect further service on him as an individual to correct any defects of the original service in this regard. The problem of locating Mr. Summers, as well as any possible problems with respect to personal jurisdiction or venue in Massachusetts, have now been effectively solved by his appointment as the next president of Harvard University. However, notwithstanding that the DOJ does not represent Mr. Summers individually, it has argued extensively that even if Mr. Summers were served correctly in his individual capacity, the complaint against him individually would have to be dismissed. Accordingly, to avoid any possibility of unnecessary inconvenience or embarrassment to Mr. Summers, the plaintiff has deferred further efforts to serve him personally until after hearing and determination of the motions to dismiss.
Belatedly and without prior notice to the plaintiff, Mr. Greenspan also raised lack of a return receipt as a defense to suit in his individual capacity. If required, he too can be served again. Because most top government officials prefer to keep their home addresses confidential, a policy of pressing plaintiffs to serve them at home rather than through their offices appears of dubious wisdom, especially in the Internet age.
D. The Corporate Shield Defenses of the Bullion Banks Are without Merit, as are Other Fact Specific Defenses of Citicorp and Deutsche Bank.
Deutsche Bank is an alien corporation subject to U.S. jurisdiction. Under 28 U.S.C. s. 1391(d), it may be sued on claims arising under federal law in any judicial district. Brunswick Corp. v. Suzuki Motor Co., Ltd., 575 F.Supp. 1412, 1425 (E.D.Wis. 1983). It may also be sued in the district where the "property that is the subject of the action is situated." 28 U.S.C. s. 1391(b)(2). Here the property affected by the alleged price fixing -- plaintiff's FCX gold preferred and BIS shares -- is, or was at the time of injury, located in Massachusetts.
Under 15 U.S.C. s. 22, a private antitrust plaintiff may also bring suit in any district where the defendant "may be found or transacts business." As an integral part of its own worldwide financial operations, Deutsche Bank operates several Massachusetts subsidiaries, including Deutsche Bank Securities and Deutsche Banc Alex. Brown, using the Alex. Brown name for marketing purposes in areas like Boston where its 200 year history carries significant cachet (P.A. 35-37). Whether a foreign corporation "transacts business" by exercising control or influence over major decisions of its subsidiary requires detailed factual examination, but rests ultimately on "practical and commercial criteria." Grappone, Inc. v. Subaru of America, Inc., 403 F.Supp. 123, 130-131 (D.N.H. 1975) (Bownes, J.).
The allegations against Citigroup revolve around three key points on which it declined to do any preliminary discovery (P.A. Ex. X): (1) the almost 50% increase in Citibank's gold derivatives from June 30 to September 30, 1999 (C. 57-58); (2) the fact that this increase took place amidst desperate efforts by the Fed and Bank of England "to quell the gold price, manage it" during the sharp rally following the Washington Agreement (C. 55); and (3) the presence since mid-1999 of former U.S. treasury secretary Robert Rubin in the management of Citigroup, Citibank's parent. While in office, Mr. Rubin was responsible for the ESF's participation in the gold price fixing scheme (C. 62-66), likely including the recently discovered gold swaps (P.A. 31-33). It is reasonable to infer that Citibank was brought into the gold price fixing scheme in September 1999 at the request of Mr. Greenspan and through the intercession of Mr. Rubin.
More generally, all the bullion bank defendants raise corporate shield defenses, complaining that the plaintiff sued the parent company when one or another wholly-owned subsidiary carries on its gold or gold derivatives business. The bullion bank defendants are all global financial powerhouses that must manage risk on a consolidated and global basis, as Deutsche Bank does (P.A. 37). The enormous size and risk of their gold derivatives positions compels the conclusion that in each case top management of the parent company must have approved if not ordered them.
Conclusion
For the forgoing reasons, the motions to dismiss, the alternative motion to stay for arbitration, and the motions to substitute should be denied.
By the plaintiff,
/s/ Reginald H. Howe
Reginald H. Howe, Pro Se
e-mail: row@ix.netcom.com
Patriots' Day, 2001
Request for Oral Argument
The plaintiff requests oral argument on the matters raised in the foregoing opposition, believing that such argument may assist the court in this factually complex case raising legal and constitutional issuers of great importance.
Certificate of Service
I, Reginald H. Howe, hereby certify that on April 19, 2001,
a true copy of the foregoing document was served by hand on
counsel of record for each party.
___________________
Reginald H. Howe
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Best Regards, J.T. |
