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

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. MARK A. JACKSON and JAMES J. RUEHLEN, Defendants.

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

SECS MOTION FOR A DETERMINATION OF FOREIGN LAW PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 44.1 AND MEMORANDUM OF LAW IN SUPPORT THEREOF

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TABLE OF CONTENTS

I. II. III. IV.

SUMMARY OF THE ARGUMENT ................................................................................. 1 NATURE AND STAGE OF THE PROCEEDING............................................................ 2 ISSUES TO BE RULED UPON BY THE COURT ........................................................... 3 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. VI.

STANDARD OF REVIEW .............................................................................................. 12 ARGUMENT .................................................................................................................... 14 A. B. 1. 2. 3. Questions of Nigerian Law Should Be Resolved Before Trial. ............................... 14 The SEC Has Proven The Substance of Nigerian Law to a Reasonable Certainty. 17 NCS Possesses The Discretion to Grant or Deny a TIP or an Extension. ...... 18 NCS Cannot Permissibly Grant TIPs Exceeding Twenty-Four Months. ....... 19 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, 17 Northrop 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 ARGUMENT Questions 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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compliance with Nigerian law is unclear. Thus, the Defendants experts intend to opine directly or indirectly on what is allegedly permissible in Nigeria notwithstanding clear and undisputed provisions of Nigerian law to the contrary. Because foreign law is for the Court, not the jury, these issues of Nigerian law should be resolved by the Court.1 Accordingly, for the reasons described herein, Plaintiff respectfully requests that the Court issue an order and findings of law in the form attached. II.

NATURE AND STAGE OF THE PROCEEDING This action arises from violations of the anti-bribery and accounting provisions of the

Foreign Corrupt Practices Act (the FCPA) by Mark A. Jackson (Jackson) and James J. Ruehlen (Ruehlen) (collectively Defendants), who are a former and a current employee of Noble Corporation (Noble), an international provider of offshore drilling services and equipment to oil companies throughout the world, including Nigeria. Noble and its wholly owned subsidiary, Noble Drilling (Nigeria) Ltd. (Noble-Nigeria), authorized its customs agent to pay bribes on Nobles and Noble-Nigerias behalf to Nigerian government officials to influence them to (1) favorably process false paperwork, (2) grant TIPs based on the false paperwork, and (3) favorably exercise or abuse their discretion in granting extensions of TIPs. The SEC alleges that Defendants, among other things, authorized the payment of bribes and as a consequence violated the anti-bribery provisions of the Securities Exchange Act of 1934 (the Exchange Act) [15 U.S.C. 78dd-1]. Fact and expert discovery is now complete and trial is currently scheduled to commence on July 9, 2014.2

The SEC has filed motions to exclude Defendants proffered expert testimony on the grounds that, among other things, the proposed testimony improperly invades the province of the Court in determining and instructing the jury on issues of foreign law. As the Court observed in its order denying Defendants motions to dismiss, the SECs requirement to provide notice pursuant to Rule 44.1 that foreign law is at issue is satisfied simply by identifying that Nigerian law may be
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III.

ISSUES TO BE RULED UPON BY THE COURT Presently before the Court is the SECs motion for a determination of Nigerian law in

effect during the relevant period in this case. Specifically, the SEC respectfully requests that the Court issue findings of law that under Nigerian law in effect during the relevant period in this case: (1) the Nigeria Customs Service (NCS) had discretion to grant or deny TIPs and TIP extensions; (2) the total duration of a TIP and TIP extension, if granted, was not to exceed twenty-four (24) months, or the term of the contract, whichever was less; (3) the payment of money or anything of value to a governmental official to influence the officials exercise of his duties was unlawful; and, (4) the making of false statements to government officials in connection with obtaining a TIP or TIP extension was unlawful. IV.

ADDITIONAL BACKGROUND IN SUPPORT OF MOTION A. The Nigeria Customs Service is vested with Discretion to Grant or Deny TIPs and any Extensions.

When goods are imported into Nigeria, the goods are typically subject to import duties at the time of entry. (See Aff. of Kofo Olugbesan (Olugbesan Aff.) (attached as Exhibit A) 10-11.)3 However, the Nigerian Customs and Excise Management Act (CEMA) No. 55 of 1958 provides that, in certain circumstances, goods temporarily imported into Nigeria may be exempt from import duty at the discretion of the Board of Customs and Excise (the Board). (Id. 9.)


at issue in the case. [Dkt. No. 87, n.15] Here, the SECs Second Amended Complaint not only indicated foreign law was at issue but cited and extensively quoted Nigerian law. (See, e.g., Second Am. Compl. [Dkt. No. 106] 20-28.)
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Kofo Olugbesan is a former Assistant Comptroller General of the Nigerian Customs Service and is currently a licensed customs agent and lawyer practicing in Nigeria. A complete description of Ms. Olugbesans background and qualifications can be found in her affidavit and in her curriculum vitae attached thereto.

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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 which are 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

All C&E Notices are published for consumption by the general public in an official government gazette called the Federation 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 in Duration.

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

As 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.
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The TI Code states [t]he requirements of the Nigeria Customs Service in respect of temporary importation and exportation is contained in Customs and Excise Notice No. 14 of 1959 and [a]ll officers are to familiarize themselves 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) (b) the equipment imported is acquired on lease basis ONLY; 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, the importer who is a party to the contract makes a formal application to Headquarters Comptroller General of Customs (CGC), asking for authority to import a specific equipment or machinery.

(c)

(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) (b) (c) (d) (e) Contract Agreement; Specific type of equipment and brochure of such equipment; Lease Agreement; Photocopy Certificate of Registration and License to operate as an oil operator or Drilling Company as applicable; After consideration of the merits, approval may be granted for a period of twelve (12) months or less depending on the duration of the Contract. Concession granted here must not be renewed more than once and the duration of the renewal must not exceed twelve months.
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(f)

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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 a Governmental 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) (b) 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 promises or offers to give, confers, procure or attempt to procure any property 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 Government Officials 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. (See SEC 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 thousand naira or two years imprisonment or both and the goods shall be 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 any business relating to customs and excise; or knowingly accepts, receives or uses any such document so counterfeit or falsified; alters any such document after it is officially issued; or 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,

(b) (c) (d)

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 require payment from citizens and businesses, both Nigerian and foreign, for services those 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) and oil 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 the paper 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 actual governance 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 REVIEW A determination of the content of foreign law is a question of law. See Fed. 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. See Fed. R. Civ. P. 44.1; Iracheta, 730 F.3d at

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 of these 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 to offer 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 Action No. W-11-CA-00264, 2012 WL 3843714, at *4 (W.D. Tex. July 30, 2012) (citing In re Avantel, S.A., 343 F.3d 311, 321-22 (5th Cir. 2003).)

See 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 to be determined through a proffer of expert testimony given to the jury, rather a determination of foreign law must be 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 facts relevant 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 the appropriate body to determine issues of foreign law.)
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VI.

ARGUMENT A. 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 or

See also 9 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 narrow facilitation payment exception of the FCPA, 15 U.S.C. 78dd-1(b). See SEC 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

Furthermore, as discussed in the SECs Motion for Partial Summary Judgment, if evidence so-called norms or common 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 was motivated to prohibit rampant foreign bribery by domestic business entities.). See also SEC Mot. for Partial Summ. J., Section VII.C.
12 11

Even if practice[s] or norms were somehow relevant here, the alleged practices at issue in this case the use of 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 to secure 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 Reasonable Certainty.

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. (See Ex. 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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affidavit relevant extracts of CEMA, the Corrupt Practices and Other Related Offenses Act, and the TI Code. (Id., Exs. B-F.) Ms. Olugbesans expert testimony and the law appended to her affidavit establish the following: 1.

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

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. 11 (emphasis added).) The use of may in Section 42 indicates the National Assemblys intent to grant the Board discretion to temporarily grant exemption from import duties. (Id.) Thus, this statute expressly vests the Board and NCS with discretion to temporarily exempt goods from import duties. (Id. 11, 13, 27.) See also United States v. Rodgers, 461 U.S. 677, 706 (1983) (The word may, when used in a statute, usually implies some degree of discretion.); United States v. Boyster, 436 F.3d 986, 990 (8th Cir. 2006) ([T]he use of may signifies the legislature's intent to establish discretionary authority unless that result would be absurd.). Regulations issued by the BoardC&E Notice No. 14also demonstrate that the issuance of TIPs and TIP extensions is discretionary. (Ex. A, Olugbesan Aff. 15, 17, 27.) These regulations provide that where the Board is satisfied that there are special reasons why, duty should not be charged certain classes of goods may apply for a temporary exemption from import duties and the Board may grant such a temporary exemption from duties subject to conditions it imposes. (Id. 15.) Thus, under CEMA and regulations promulgated thereunder, issuance of a TIP or TIP extension is vested in the sound discretion of the Board. This discretion is in turn delegated by
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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-Four Months.

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 His or 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 With Obtaining 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. 2830.) VII.

CONCLUSION For 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. 490177 S.D. Tex. ID No. 1572792 ALFRED A. DAY MA Bar No. 654436 SHARAN K.S. CUSTER D.C. Bar No. 464495 Securities and Exchange Commission 100 F Street, NE Washington, 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. Bryan Patrick M. Bryan

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