Mirtchev Appeal 2nd Reply Brief, January 6, 2014. · PDF file529 U.S. 494 (2000) ... 606 F.3d 1306 (11th Cir. 2010) ... *Rafferty v. NYNEX Corp., 60 F.3d 844 (D.C. Cir. 1995)

No. 13-7088 (Consolidated w/ 13-7089) ORAL ARGUMENT NOT YET SCHEDULED

IN THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

DEVINCCI SALAH HOURANI AND ISSAM SALAH HOURANI,

Plaintiffs-Appellants/Cross-Appellees,

v.

ALEXANDER V. MIRTCHEV AND KRULL CORPORATION,

Defendants-Appellees/Cross-Appellants.

REPLY BRIEF OF CROSS-APPELLANTS

Richard W. Beckler [email protected] BRACEWELL & GIULIANI LLP 2000 K Street, N.W., Suite 500 Washington, DC 20006 Telephone: (202) 828-5800 Facsimile: (800) 404-3970

Stephen Sale [email protected] John D. Quinn [email protected] SALE & QUINN, P.C. 1150 17th Street, NW, Suite 305 Washington, DC 20036 Telephone: (202) 872-4713 Facsimile: (202) 887-5137

Warren W. Harris [email protected] Jeffrey L. Oldham [email protected] BRACEWELL & GIULIANI LLP 711 Louisiana Street, Suite 2300 Houston, Texas 77002-2770 Telephone: (713) 223-2300 Facsimile: (800) 404-3970 Counsel for Defendants-Appellees/Cross-Appellants Alexander V. Mirtchev and Krull Corporation

USCA Case #13-7088 Document #1473662 Filed: 01/06/2014 Page 1 of 37

-i-

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ................................................................................... ii

GLOSSARY OF ABBREVIATIONS .................................................................... vi

INTRODUCTION AND SUMMARY OF THE ARGUMENT ..............................1

ARGUMENT ............................................................................................................6

I. Rule 11 Sanctions For Pleading Contradictory Facts Were Warranted .........6

A. Plaintiffs filed an amended complaint that is fatally contradicted by their prior pleading and sworn statements, as well as by their continued assertions in other forums ....................................................6

B. Plaintiffs’ contradicted amended complaint violates Rule 11, and the District Court’s denial of sanctions was an error of law .......12

C. Plaintiffs’ brief mischaracterizes the District Court’s opinion ..........16

1. The District Court found that Plaintiffs contradicted themselves ................................................................................16

2. The District Court did not rely on its Rule 15 order in its Rule 11 opinion, and if it had, that would have been erroneous ..................................................................................17

II. The District Court Should Have Imposed Sanctions Because Plaintiffs Submitted And Continue To Rely On Forged Documents...........................21

A. The request for sanctions for filing forged documents was not moot ....................................................................................................21

B. Sanctions are warranted based on Plaintiffs’ forged documents .......24

III. Deterrence Of Litigation Misconduct Is The Primary Purpose Of Sanctions And Compels Imposition Of Sanctions Here ..............................26

CERTIFICATE OF COMPLIANCE ......................................................................29

CERTIFICATE OF SERVICE ...............................................................................30


-ii-

TABLE OF AUTHORITIES*

Page Cases

*Aoude v. Mobil Oil Corp., 892 F.2d 1115 (1st Cir. 1989) ............................................................................. 25

Athridge v. Rivas, 421 F. Supp. 2d 140 (D.D.C. 2006) ...................................................................... 7

Atkins v. Fischer, 232 F.R.D. 116 (D.D.C. 2005) ........................................................................... 12

Baker v. Carr, 369 U.S. 186 (1962) ............................................................................................ 24

*Beck v. Prupis, 529 U.S. 494 (2000) ............................................................................................ 11

*Bender v. Jordan, 679 F. Supp. 2d 85 (D.D.C. 2010) ...................................................................... 15

Bus. Guides, Inc. v. Chromatic Commc’ns Enters., 498 U.S. 533 (1991) ...................................................................................... 12, 18

In re Caratube Int’l Oil Co., No. 1:10-mc-285 (Aug. 6, 2010) ........................................................................ 26

Caratube Int’l Oil Co. v. Republic of Kazakhstan, No. ARB/08/12 (ICSID June 16, 2008) .............................................................. 26

*Carswell v. Air Line Pilots Ass’n, Int’l, 248 F.R.D. 325 (D.D.C. 2008) ........................................................................... 13

City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S. 283 (1982) ............................................................................................ 23

Cobell v. Norton, 214 F.R.D. 13 (D.D.C. 2003) ............................................................................. 26

* Authorities upon which we chiefly rely are marked with asterisks.


-iii-

*Colliton v. Cravath, Swaine & Moore LLP, No. 08-0400, 2008 WL 4386764 (S.D.N.Y. Sept. 24, 2008), aff’d, 356 F. App’x 535 (2d Cir. 2009)......................................................... 19, 20

*Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (1990) ................................................................................ 22, 24, 27

Day v. Corner Bank (Overseas) Ltd., 789 F. Supp. 2d 136 (D.D.C. 2011) .................................................................... 13

In re Flanagan, 999 F.2d 753 (3d Cir. 1993) ............................................................................... 21

Fleming & Assocs. v. Newby & Tittle, 529 F.3d 631 (5th Cir. 2008) .............................................................................. 22

Foman v. Davis, 371 U.S. 178 (1962) ............................................................................................ 18

Footbridge Ltd. Trust v. Zhang, 358 F. App’x 189 (D.C. Cir. 2009) ..................................................................... 14

Garcia v. Berkshire Life Ins. Co., 569 F.3d 1174 (10th Cir. 2009) .......................................................................... 25

Greenburg v. Roberts Props. Ltd., 246 F. App’x 500 (9th Cir. 2007) ....................................................................... 26

Griggs v. Pace Am. Group, 170 F.3d 877 (9th Cir. 1999) .............................................................................. 18

Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), overruled on other grounds, Standard Oil v. United States, 429 U.S. 18 (1976) ............................................ 27

In re Interbank Funding Corp. Sec. Litig., 629 F.3d 213 (D.C. Cir. 2010) ............................................................................ 19

LaShawn A. v. Barry, 87 F.3d 1389 (D.C. Cir. 1996) ............................................................................ 20

Lucas v. Duncan, 574 F.3d 772 (D.C. Cir. 2009) ............................................................................ 14


-iv-

Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803) ............................................................................. 24

Peer v. Lewis, 606 F.3d 1306 (11th Cir. 2010) .......................................................................... 14

*Rafferty v. NYNEX Corp., 60 F.3d 844 (D.C. Cir. 1995) .............................................................................. 15

Reynolds v. U.S. Capitol Police Bd., 357 F. Supp. 2d 19 (D.D.C. 2004) ...................................................................... 15

Scott v. ADT Security Sys., Inc., 205 F.3d 1334 (4th Cir. Feb. 28, 2000) (per curiam) ......................................... 22

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) ............................................................................................ 11

Shepherd v. Am. Broad. Cos., 62 F.3d 1469 (D.C. Cir. 1995) ............................................................................ 25

*Sherman Treaters Ltd. v. Ahlbrandt, 115 F.R.D. 519 (D.D.C. 1987) ......................................................... 12, 13, 15, 18

United Bhd. of Carpenters & Joiners v. Operative Plasterers’ & Cement Masons’ Int’l Ass’n, 721 F.3d 678 (D.C. Cir. 2013) ............................................................................ 21

Vander Jagt v. O’Neill, 699 F.2d 1166 (D.C. Cir. 1983) .......................................................................... 24

Westmoreland v. CBS, Inc., 770 F.2d 1168 (D.C. Cir. 1985) .................................................................... 13, 15

*Wilkie v. Robbins, 551 U.S. 537 (2007) ............................................................................................ 10

Willy v. Coastal Corp., 503 U.S. 131 (1992) ............................................................................................ 22

*World Wide Minerals Ltd. v. Republic of Kazakhstan, 296 F.3d 1154 (D.C. Cir. 2002) .......................................................................... 16


-v-

Rules

*FED. R. CIV. P. 11 .................................... 3, 6, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20

FED. R. CIV. P. 15 ................................................................................... 17, 18, 19, 20


-vi-

GLOSSARY OF ABBREVIATIONS

Citations: BR/x Brief for Plaintiffs-Appellants, at page x DefsBR/x Brief of Defendants–Appellees/Cross-Appellants, at page x JAx: Deferred Joint Appendix, at page x. (Initial briefs will refer to

District Court docket item number y, at page x, as Docy/x, and to the Transcript of the April 16, 2013 hearing before the Hon. Thomas F. Hogan, at page x, as TR/x. Final briefs will use the same format for items not included in the Joint Appendix.)

RespBR/x Reply Brief for Appellants and Opposition for Cross-Appellees,

at page x Terms: Aliyev KGB General Rakhat Aliyev, the brother-in-law of Plaintiff

Issam Hourani and the ex-husband of Dariga Nazarbayeva Dariga Dariga Nazarbayeva, the daughter of Kazakhstan’s President

Nursultan Nazarbayev Defendants Collectively, Dr. Alexander V. Mirtchev and Krull Corporation ICSID The International Centre for the Settlement of Investment

Disputes Mirtchev Dr. Alexander Mirtchev, a U.S. academic and macroeconomics

consultant Nazarbayev President Nursultan Nazarbayev of Kazakhstan Plaintiffs Collectively, Devincci Salah Hourani and Issam Salah Hourani RICO Racketeer Influenced and Corrupt Organizations Act UNCITRAL The United Nations Commission on International Trade Law


INTRODUCTION AND SUMMARY OF THE ARGUMENT

At base, Plaintiffs’ grievance is and always has been that the Government of

Kazakhstan seized all of their assets in Kazakhstan. They tried to re-plead their

case to avoid the many legal principles that bar such claims from being litigated in

a U.S. court, but they cannot escape the fact that they are asking a U.S. court to

apply U.S. law to acts alleged to have occurred entirely overseas; to declare invalid

actions of the Kazakhstan government within its own territory; and to award

damages based on that government’s alleged extortion of their property. None of

Plaintiffs’ arguments avoids the many bases for dismissing this case.

Yet the District Court erred in denying sanctions, and Plaintiffs’ latest brief

(“Response”) only highlights the need for sanctions on these litigious Plaintiffs.

Plaintiffs’ original complaint in this case explicitly claimed that their media assets

(indeed, “all” their assets) were expropriated by the Kazakh government, including

a chart showing the “current status” of these Kazakhstan assets:

Company Name Current Status Alma Media Expropriated by Kazakh

Government in 2007-08 … KTK Television

Expropriated by Kazakh Government in 2007-08

JA47 (excerpting two columns from larger table). Plaintiffs alleged:

Dariga Nazerbayeva then warned Devincci Hourani that the government would take more drastic actions against his


-2-

family if he did not sign KTK Television and Alma Media over to this government fund [the First Presidential Fund]. Under duress, Devincci Hourani signed the necessary documents, and with the stroke of a pen, the Government of Kazakhstan expropriated two of the country’s remaining independent media outlets, which were worth hundreds of millions of dollars.

JA53-54.

But then, after Defendants’ motion to dismiss raised numerous legal bars to

Plaintiffs’ allegations against the Kazakhstan government, Plaintiffs tried to mask

their expropriation allegations in their amended complaint by suddenly declaring

that their media assets were stolen by Dariga Nazarbayeva (the Kazakhstan

president’s daughter) acting as a private citizen, not expropriated by the

government along with their other assets. Their amended complaint transformed

Dariga from a supporting character and government agent, to a principal acting for

her own benefit and a co-conspirator with Dr. Mirtchev. The amended complaint

still alleged the media assets went into the “First Presidential Fund,” but Plaintiffs

now claim it is “by no means clear” that is a government fund. RespBR/17.

Plaintiffs’ amended-complaint allegations are squarely contradicted by the

original complaint, affidavits they filed in support of that complaint, and their prior

and concurrent statements in other forums—demonstrating they could not have

reasonably believed their allegations to be supported by evidence. Yet Plaintiffs

have nonetheless (1) continued to assert in other forums that all of their assets were


-3-

seized by the government, while (2) in this Court, still defending the amended-

complaint allegations of private extortion. This conduct is beyond the pale and

requires sanctions under Rule 11 of the Federal Rules of Civil Procedure.

In addition, Plaintiffs filed and relied on documents that are forgeries. The

documents purport to be official Kazakhstan government communications that

supposedly would link Defendants to Plaintiffs’ allegations. To prove the

documents were forged, Defendants filed statements from the purported authors or

their representatives denying the documents’ authenticity, JA104-07; JA108-11,

and reports by pre-eminent experts, including noted forensic document examiner

Gideon Epstein, who concluded that Plaintiffs’ filed documents are “cut and

pasted” forgeries, and that “[i]t can be stated, without any reservations,” that the

purported author “did not sign his name” to two of the documents. JA387-88.

Plaintiffs claimed not to rely on the documents after amending their

complaint, but those documents remain the only basis for Plaintiffs’ allegations

against Defendants. As the District Court correctly found, “the critical (if not sole)

piece of evidence substantiating Defendants’ involvement with the scheme

outlined in the Amended Complaint is the Daulbaev memorandum, which

Defendants challenge as a forgery and upon which Plaintiffs claim to no longer

rely.” JA462 n.13. The so-called “Daulbaev memorandum” purported to be an

internal Kazakhstan government letter that Plaintiffs say they received from


-4-

Aliyev, who in turn said he received it from unnamed sources within the

Kazakhstan government. See JA264-66. Plaintiffs submitted sworn affidavits

below stating they filed suit against Defendants on the basis of this memorandum,

which they claim shows that Mirtchev was part of a “task force” assembled to

investigate General Aliyev and Plaintiffs. See JA279-82, 289-90. Plaintiffs tried

in the amended complaint to distance themselves from the forged documents, but

the forgeries remain the only connection between their allegations and Defendants.

That is why the amended complaint, instead of pleading specific facts regarding

Defendants’ alleged role in the purported scheme, merely asserts that Defendants

“agreed” and “conspired” with Dariga. Plaintiffs’ conclusory pleading

demonstrates that, although they are no longer cited, the forged documents remain

the sole basis for this lawsuit.1 See JA462 n.13.

Notably, Plaintiffs filed these documents in international tribunals, but when

they were challenged there, Plaintiffs chose simply to withdraw them, causing one

tribunal to note: “[W]hile the allegedly forged documents were withdrawn by

Claimant…the Tribunal cannot overlook that their submission and later withdrawal

1 At the hearing below, Plaintiffs’ counsel affirmed the reliance on the

affidavits, stating that “both of the plaintiffs have submitted declarations to this court” to support their claim that Plaintiffs “had no idea of the alleged role of Dr. Mirtchev in assisting Dariga” prior to 2010, when they received the purported memorandum. JA520-21. And in their opening brief on appeal, they admitted they have no more information about Defendants’ role. BR/37-39.


-5-

throw a doubt on Claimant’s credibility.”2 JA432. Plaintiffs’ reliance on falsified

evidence taints their entire case.3

The District Court gave short shrift to Defendants’ sanctions motions,

declining to even consider the request based on forged documents on mootness

grounds. Defendants understand the District Court’s reluctance to confront these

issues, and do not take lightly the gravity of the sanctions allegations. But these

are important issues and are not just alternative grounds for affirming the dismissal

of the amended complaint, particularly because Defendants requested additional

relief. The primary purpose of sanctions is to deter misconduct. Plaintiffs have

demonstrated throughout this and related cases that they are willing to do anything

to keep their claims alive, including proceeding in this Court with allegations that

they have squarely contradicted in another tribunal. Conduct like this is exactly

why courts possess—and should exercise—the power to sanction litigants. The

Court should remand with instructions to impose sanctions.

2 That matter related to allegations that the Kazakhstan government seized

Caratube International Oil Company, allegedly 92%-owned by Devincci Hourani. JA431. Devincci has filed a second request for arbitration relating to Caratube following the tribunal’s dismissal of his first claim. See Add. to Br. of Defs.-Appellees/Cross-Appellants (“Add.”).

3 Remarkably, the same counsel who filed and then withdrew these documents on Plaintiffs’ behalf before the international tribunals later filed these documents in the District Court. See JA428 (identifying Crowell & Moring as Claimant’s counsel). These same lawyers also filed both the original and the (contradictory) amended complaint. See JA81, 411.


-6-

ARGUMENT

I. Rule 11 Sanctions For Pleading Contradictory Facts Were Warranted.

A. Plaintiffs filed an amended complaint that is fatally contradicted by their prior pleading and sworn statements, as well as by their continued assertions in other forums.

Plaintiffs deny that their amended-complaint allegations are contradicted by

their prior pleadings and statements, RespBR/40-42, but their attempt to reconcile

the allegations fails. Even the District Court recognized the contradictions. See

JA464-67; see also infra Section I.C.1. And Plaintiffs have no explanation for

their ongoing, contradictory assertions in other forums.

As Defendants explain in their opening brief, Plaintiffs’ original complaint

unequivocally asserted that the Kazakhstan government seized all their assets as a

result of a falling-out between President Nazarbayev and Plaintiffs’ relative

Aliyev, who is Dariga’s former husband and the former Kazakhstan KGB (now

KNB) head. JA22-25, 45-56, 63-71, 77, 79. The original complaint said Alma

Media and KTK Television were “[e]xpropriated by Kazakh Government in 2007-

08.” JA47. Plaintiffs claimed Defendants conspired with Nazarbayev, Dariga, and

the Kazakhstan government to participate in the expropriation. JA23, 48, 56, 63-

71. The central story was about a government vendetta against Plaintiffs.

Defendants raised various grounds for dismissing the original complaint,

including that the claims were barred by the act of state and related doctrines


-7-

because they would require the court to invalidate official acts of the Kazakhstan

government. JA84-86. Faced with Defendants’ motion, Plaintiffs amended their

complaint. JA400-14. The District Court noted that the amended complaint is

clearly drafted to downplay the role of the Kazakhstan government in an attempt to

avoid the bars asserted by Defendants. JA466 n.16.

But the amended complaint does not merely downplay the role of the

Kazakhstan government. It changes the allegations in the original complaint that

Alma Media and KTK Television were “[e]xpropriated by [the] Kazakh

Government,” with Dariga acting as government agent, to the starkly contradictory

claim that Dariga, acting as a private citizen, personally extorted the media assets

for her own benefit as she contemplated a career in politics. Compare JA45-54,

66-67 & 71 with JA401-05. Further, in the original complaint and affidavits filed

in support, Plaintiffs said that the First Presidential Fund, which obtained title to

the assets, was a government fund; now, they claim this is “by no means clear” and

that “they need discovery to determine whether the First Presidential Fund is

actually a ‘government’ fund.”4 See JA466 n.16; RespBR/17, 31.

4 Plaintiffs argue that there has been “no judicial admission” of the fact that

the First Presidential Fund is government-owned. RespBR/17. They do not contest, however, that they made an evidentiary admission regarding government ownership of the First Presidential Fund. See Athridge v. Rivas, 421 F. Supp. 2d 140, 151 (D.D.C. 2006). Plaintiffs could not have reasonably believed the First Presidential Fund to be government-owned, as asserted in the original complaint and elsewhere, when they now claim this is “by no means clear.” RespBR/17.


-8-

Plaintiffs’ amended complaint is also contradicted by statements advancing

their government-vendetta theory in other venues. For example, just days after

notifying the District Court that they intended to amend their complaint, JA347-49,

Issam filed a sworn statement with UNCITRAL representing that:

[F]rom May 2007 forward, each one of my family’s and my own businesses were effectively paralyzed by the Kazakh Government.… Within months, those same businesses were confiscated. For example, to deprive my brother, Devincci, of his interests in the KTK television channel, Dariga Nazarbayeva…forced him to sign over his shares to the “First Presidential Fund.”… The Government’s actions against me and my family...involving the expropriation of billions of dollars worth of our individual and joint investments in Kazakhstan…have been entirely political. These actions were part of a concerted effort by the Government to strike out at Mr. Aliyev and all of his family, allies and potential financers….

JA438-39. He further testified that “[t]he expropriation of all my family’s

businesses (including Kassem Omar’s) in Kazakhstan within the space of about a

year…and the harassment and intimidation that ensued, coincided exactly with the

political falling out between…Aliyev and…Nazarbayev.” Doc82-7/8.

Similarly, Devincci swore that he signed over title to his media assets to the

government-owned First Presidential Fund as follows:

I went to see [Dariga]…and…she…demand[ed] that I sign over my stake in KTK to the First President Fund, owned by the Government. In addition, she also presented papers for me to sign over my brother Issam’s shares in Alma Media and my sister-in-law Gulshat’s shares in KTK.… When I hesitated to sign these documents, she warned me of what the


-9-

Republic could do against me and my family if I did not cooperate. Thus, when I signed these papers, hundreds of millions of dollars of media interests were taken away at the stroke of a pen.

JA444-45. Neither of these declarations said a word about Dariga seizing the

assets for her own benefit. These statements are irreconcilable with the amended

complaint.5

Plaintiffs claim their pleadings are consistent because they each allege

Dariga played a “primary role in depriving Plaintiffs of their assets.” RespBR/41.

The District Court rejected this argument, finding the switch from Dariga-as-

government-agent to Dariga-as-private-actor was “contradict[ory]” and deeming

“Plaintiffs’ explanation difficult to accept” in light of “the number and nature of

the inconsistencies between the complaints.” JA464-67. The District Court was

correct, and the contradiction is significant because it changes the character of the

claims from a government-driven conspiracy to a private individual engaging in a

personally-motivated scheme. And that shift was intentional, to avoid the bars

raised by Defendants. Plaintiffs’ attempt to downplay the contradictions, by

claiming they have always alleged a “primary role” by Dariga, is unconvincing.

5 Notably, the same counsel who represented Plaintiffs in the UNCITRAL

arbitration where Plaintiffs made these statements also represented Plaintiffs when they notified the District Court of their intent to file an amended complaint just a few days earlier. See JA437, 443. Given these virtually simultaneous, contradictory statements, they could not have reasonably believed the amended-complaint allegations to be supported by the evidence. See infra Section I.B.


-10-

Plaintiffs’ conduct on appeal only heightens the need for sanctions, as they

change their factual focus when necessary to respond to case authority they cannot

distinguish, and obfuscate the law when they cannot dodge the allegations in their

amended complaint. For example, Plaintiffs do not dispute that Wilkie v. Robbins,

551 U.S. 537 (2007), precludes claims for extortion where a government is alleged

to be the beneficiary. RespBR/16-19. They instead try to distinguish Wilkie on the

ground that Dariga is alleged to be acting in her private capacity and for her own

benefit, not on behalf of the Kazakhstan government, when Alma Media and KTK

Television were taken from Plaintiffs. RespBR/18. That argument is possible only

because of their shift in allegations to keep this suit alive, yet those allegations are

directly contradicted by unequivocal allegations in the original complaint that these

assets were “[e]xpropriated by Kazakh Government in 2007-08.” JA47.

Similarly, Plaintiffs shift their facts and legal argument to blur the lines

between civil and criminal RICO to try to counter the District Court’s ultimate

finding that “the predicate acts that proximately caused Plaintiffs’ injury…were

squarely extraterritorial and therefore outside of RICO’s reach.” JA460-61.

Plaintiffs’ distortions cannot hide the fact that the only domestic act they allege is a

conspiracy between Dariga and Mirtchev to extort, which is not sufficient as a civil

RICO predicate. In this civil RICO case, Plaintiffs had to plead that their injuries

were proximately caused by some domestic predicate act of racketeering, as the


-11-

District Court properly found. See, e.g., Sedima, S.P.R.L. v. Imrex Co., 473 U.S.

479, 496-97 (1985). Merely alleging that Defendants entered into a conspiracy is

not sufficient to bring a civil RICO claim. See Beck v. Prupis, 529 U.S. 494, 505

(2000). A conspiracy, by itself, is not a predicate act in a civil RICO case because

a conspiracy alone does not cause any injury. See id. at 502-03. In sum, Rule 11

sanctions are warranted for Plaintiffs’ efforts in the amended complaint to change

the facts and muddle the law.

Indeed, Plaintiffs continue to contradict their amended complaint. Devincci

filed a request for arbitration with ICSID in June 2013, asserting that the

Kazakhstan government, with Dariga acting as an organ of the state, expropriated

his ownership interest in Caratube as a result of a government vendetta against

Aliyev. Add. at 7. He stated Dariga was a “member…of the Kazakh Parliament

from September 2004 until July 4, 2007,” and held positions at various government

entities, including the “Fund of the First President of the Republic of Kazakhstan.”6

Id. Plaintiffs’ contradiction of their amended-complaint allegations with

irreconcilable statements in other proceedings—while still defending the amended-

complaint allegations in this Court—demonstrates the need for sanctions.

6 In the request for arbitration, Devincci characterizes the Fund of the First

President as a government entity, Add. at 7-8, yet, in their latest brief, Plaintiffs persist in claiming “there are no allegations that this Fund is a government entity,” RespBR/31.


-12-

Incredibly, other than a vague reference to “what may have been said

elsewhere in other proceedings,” Plaintiffs ignore this document (as well as their

statements in the UNCITRAL proceedings).7 RespBR/42. Yet they continue to

insist in this Court that Dariga was “a private person (with no government title)”

during the relevant time period, RespBR/17, which they identify as “June/July,

2007,” BR/6. They offer no explanation for how they can assert here that Dariga

was in June/July 2007 a “private person (with no government title),” and

simultaneously assert before the ICSID that she was a member of Kazakhstan’s

Parliament until July 4, 2007. These contradictions undercut Plaintiffs’ credibility.

B. Plaintiffs’ contradicted amended complaint violates Rule 11, and the District Court’s denial of sanctions was an error of law.

Plaintiffs’ attempt to change their story violates Rule 11, which requires

parties and attorneys submitting pleadings to reasonably believe the allegations are

supported by evidence. Bus. Guides, Inc. v. Chromatic Commc’ns Enters., 498

7 Plaintiffs try to ignore their statements elsewhere even as they concede

that, on a sanctions motion, “a court should consider the entire record,” including “the entire case and prior motions.” RespBR/5, 46 (citing Sherman Treaters Ltd. v. Ahlbrandt, 115 F.R.D. 519, 522 (D.D.C. 1987)). They offer no reason why the Court should not take judicial notice of or consider these statements made in related cases. See BR/iii (referring to “related international arbitrations” as related cases). Indeed, it “has long been held that in considering the implementation of sanctions against a party or counsel to litigation, a district court may consider all the circumstances surrounding the alleged violation. The totality of circumstances can include events which did not occur in the case proper but occurred in other cases and are, by their nature, relevant to the pending controversy.” Atkins v. Fischer, 232 F.R.D. 116, 129 (D.D.C. 2005) (citations and quotations omitted).


-13-

U.S. 533, 541 (1991). Plaintiffs cannot have reasonably thought Dariga was acting

in a private capacity, given their repeated testimony and pleading elsewhere that

she was acting as a government agent. By submitting an amended complaint that

is contradicted by their earlier, concurrent, and later pleadings and sworn

statements, Plaintiffs and their attorneys violated Rule 11. See, e.g., Day v. Corner

Bank (Overseas) Ltd., 789 F. Supp. 2d 136, 147-48 (D.D.C. 2011) (if complaint is

contradicted by plaintiff’s sworn statement filed in another proceeding, Rule 11

sanctions are appropriate); Carswell v. Air Line Pilots Ass’n, Int’l, 248 F.R.D. 325,

330 (D.D.C. 2008) (where “a plaintiff makes sensational allegations with respect to

a defendant without any factual basis whatsoever, and then tries to rescue his

claims against that defendant from dismissal by introducing an entirely different

theory of liability in his legal memoranda, the failure of the plaintiff and his

counsel to make sure the original complaint was well grounded in fact is clearly a

violation of Rule 11”). Accordingly, they must be sanctioned.

The District Court recognized the contradictions, but applied the wrong legal

standard by considering if Plaintiffs filed the amended complaint in “bad faith.”

JA464-67. As Plaintiffs recognize, RespBR/42, the bad-faith standard for Rule 11

was replaced in 1983 with a reasonableness standard. See Westmoreland v. CBS,

Inc., 770 F.2d 1168, 1177 (D.C. Cir. 1985); Sherman Treaters Ltd. v. Ahlbrandt,

115 F.R.D. 519, 522 (D.D.C. 1987).


-14-

Plaintiffs argue that, because Defendants’ briefing below referred to the

objective standard and the District Court cited that standard, the District Court

must have applied the right standard.8 RespBR/45-46. But Plaintiffs do not

mention the fact that they urged error on the District Court by seeking denial of

sanctions based on a bad-faith standard.9 See JA446-47. And they cannot avoid

the fact of the District Court denial of the motion on the specific ground of no “bad

faith.” JA467. That was legal error and an abuse of discretion. See, e.g., Peer v.

Lewis, 606 F.3d 1306, 1312 (11th Cir. 2010)10; see also Lucas v. Duncan, 574 F.3d

8 Plaintiffs cite Footbridge Limited Trust v. Zhang, 358 F. App’x 189 (D.C.

Cir. 2009), to argue the District Court must have considered every point raised in the briefs. RespBR/45. The appellant there complained that the court had not explicitly addressed all his legal arguments before denying sanctions, not that the court applied the wrong standard. Footbridge, 358 F. App’x at 191. Here, the District Court explained why it denied sanctions, and that explanation indicates it applied the wrong standard. See JA467.

9 That was also Plaintiffs’ response when Defendants sent a “safe harbor” letter to Plaintiffs’ counsel, pursuant to Rule 11(c)(2), requesting that they withdraw the amended complaint because it was contradicted by their original complaint and affidavits. JA426. Plaintiffs claimed the District Court’s decision granting leave to amend effectively immunized the amended complaint from sanctions. JA446-47.

10 Contrary to Plaintiffs’ assertion, RespBR/43 n.18, Peer v. Lewis is clear that a court’s denial of Rule 11 sanctions should be reversed when the assertions in the pleading at issue were “objectively frivolous at the time of filing.” 606 F.3d 1306, 1312 (11th Cir. 2010). That court ultimately reversed the denial of sanctions based on its inherent power, since the Rule 11 formalities had not been followed, but also found the evidence showed a Rule 11 violation. Id. at 1312-13.


-15-

772, 775 (D.C. Cir. 2009) (reversal proper if Rule 11 denial is based on erroneous

view of the law).

Plaintiffs argue the District Court had discretion to consider bad faith under

Rule 11 even after the 1983 change from a bad-faith standard to a standard of

objective reasonableness. See RespBR/43, 46. They also note that Rafferty v.

NYNEX Corp.—which held that “once the district court finds that a pleading is not

well grounded in fact…, ‘Rule 11 requires that sanctions of some sort be

imposed,’” see 60 F.3d 844, 852 (D.C. Cir. 1995) (quoting Westmoreland, 770

F.2d at 1174-75)—applied the pre-1993 version of Rule 11. RespBR/43. While

Plaintiffs are correct that the 1993 amendments gave courts more discretion

regarding Rule 11 sanctions, they ignore the fact that courts have continued to

apply Rafferty. See, e.g., Bender v. Jordan, 679 F. Supp. 2d 85, 88 (D.D.C. 2010);

Reynolds v. U.S. Capitol Police Bd., 357 F. Supp. 2d 19, 24 (D.D.C. 2004).

More importantly, Plaintiffs cite no support for the proposition that the

discretion allowed by Rule 11 is so broad that judges may apply the bad-faith

standard that was specifically rejected in 1983. To so suggest ignores the 1983

amendments or would render them superfluous. See Sherman Treaters, 115 F.R.D.

at 523. Plaintiffs cite no authority supporting their position that a district court can

use a bad-faith standard to deny Rule 11 sanctions.


-16-

In the end, Plaintiffs’ arguments against Rule 11 sanctions highlight the trap

that Plaintiffs have set for themselves. They claim they have not made inconsistent

assertions, arguing that they have alleged simply “that their assets were

expropriated by the government of Kazakhstan” while “Dariga was assisted by

Defendants in taking some of the spoils for herself.” RespBR/40. If that is their

claim—that Dariga was a participant in official government expropriation—then

their complaint pleads a claim that explicitly calls into question the validity of

Kazakhstan government action within its borders, and must be dismissed under the

act of state and related doctrines. See World Wide Minerals Ltd. v. Republic of

Kazakhstan, 296 F.3d 1154, 1164-65 (D.C. Cir. 2002). If not—if Plaintiffs indeed

pleaded that Dariga was acting for her own personal benefit, not on behalf of the

government—then they have fatally contradicted their earlier and concurrent

pleadings, and sanctions are required.

C. Plaintiffs’ brief mischaracterizes the District Court’s opinion.

Plaintiffs’ Response offers several other arguments that the District Court

correctly denied Rule 11 sanctions, but none of them has merit.

1. The District Court found that Plaintiffs contradicted themselves.

Plaintiffs misstate the record in asserting that “the District Court made no

finding of contradicting facts.” RespBR/40. Plaintiffs point to the District Court’s

April 2012 opinion allowing Plaintiffs to amend their complaint, RespBR/39-42,


-17-

yet ignore that when the District Court later addressed Defendants’ Rule 11

motion, it agreed with Defendants that the story told in the amended complaint

“contradict[s]” the story told in the original complaint and elsewhere in numerous

ways, including with respect to Dariga’s role (government agent versus private

citizen) and the fate of the media assets. JA464-66. The District Court then

rejected Plaintiffs’ attempt to reconcile the allegations, reiterating that a party

cannot “contradict” its prior pleading, and stating that, “[g]iven the number and

nature of the inconsistencies between the complaints, the Court finds Plaintiffs’

explanations difficult to accept.” JA466-67. It also noted these inconsistencies

could be “alternative grounds for the dismissal of the complaint.” JA467.

Plaintiffs’ claim of “no finding of contradicting facts” is simply not true.

2. The District Court did not rely on its Rule 15 order in its Rule 11 opinion, and if it had, that would have been erroneous.

Plaintiffs open their cross-appeal response by highlighting that Defendants

pointed out the inconsistent or inadequate pleadings multiple times below, without

explaining why they think this matters to the Rule 11 issue before the Court.11

RespBR/39-40. They later make the curious claim that the decision denying Rule

11 sanctions based on an absence of “bad faith” is defensible because the District

11 Plaintiffs’ reference to Defendants’ motion to strike the original complaint

is odd, as that motion was filed well before the amended complaint was even filed, and thus the motion to strike was mooted by the amended complaint and obviously did not address Plaintiffs’ amended-complaint contradictions.


-18-

Court was merely “harken[ing] back to [its] decision to permit” Plaintiffs to file

their amended complaint. RespBR/47. As a factual matter, though, the District

Court did not cite its prior ruling anywhere in its discussion about sanctions.

Regardless, if the District Court relied on Rule 15 in resolving the Rule 11

motion, that would be error and alone would require reversal. The law prescribes

different standards for Rule 11 motions than for Rule 15 motions. As Plaintiffs

agree, the Rule 11 standard is objective reasonableness, not bad faith. See Bus.

Guides, 498 U.S. at 549-50. Under Rule 15, however, leave to amend is to be

given absent bad faith, undue delay, failure to cure deficiencies in previous

amendments, and futility of amendment. See Foman v. Davis, 371 U.S. 178, 182

(1962) (quoting FED. R. CIV. P. 15(a)(2)). These are distinct standards serving

different purposes.12 Rule 15 standards cannot apply when deciding a Rule 11

motion, particularly because Rule 11 was amended so that bad faith would not be

12 Even when “bad faith” was the standard for Rule 11, the analysis was

different than it is in the Rule 15 context. A court considering if a Rule 15 motion is made in bad faith generally looks at whether the plaintiff is seeking to amend in order to delay proceedings or prolong the litigation by adding baseless theories, see Griggs v. Pace Am. Group, 170 F.3d 877, 881 (9th Cir. 1999), not whether the plaintiff subjectively believes the contentions in a pleading to be supported, as in the pre-1983 Rule 11 context, see Sherman Treaters, 115 F.R.D. at 522.


-19-

the standard. Plaintiffs cite no authority suggesting a court can apply Rule 15, and

its bad-faith standard, to resolve a Rule 11 motion.13

The Rule 11 arguments also differed factually from the Rule 15 arguments,

because when the District Court considered the Rule 15 motion, it was not yet clear

that Plaintiffs would continue to pursue their original government-expropriation

theory in other tribunals. See JA357-72. The Rule 11 motion was the proper place

for Defendants to seek sanctions for the contradicted pleading. The District Court

considered Defendants’ arguments regarding Plaintiffs’ contradictions using

Rule 11 standards for the first time in considering Defendants’ sanctions motion,

and as noted above, it agreed with Defendants that Plaintiffs had contradicted

themselves. Plaintiffs’ reliance on the prior Rule 15 ruling, and their suggestion

that the District Court relied on that ruling, cannot avoid the need for reversal.

Colliton v. Cravath, Swaine & Moore LLP is instructive on this point. See

No. 08-0400, 2008 WL 4386764 (S.D.N.Y. Sept. 24, 2008), aff’d, 356 F. App’x

535 (2d Cir. 2009). That court found Rule 11 sanctions were appropriate where

the plaintiff’s “Amended Complaint contradicts his verified original complaint, in

13 The Rule 15 factors may correlate to some other procedural standards, but

even then, they are not the same. For example, an amended complaint would be “futile” if, on its face, it would not survive a motion to dismiss. See In re Interbank Funding Corp. Sec. Litig., 629 F.3d 213, 215 (D.C. Cir. 2010). Yet Plaintiffs do not argue—nor could they—that the District Court could not dismiss the amended complaint for failure to state a claim, simply because it had previously found the amendment would not be futile.


-20-

a transparent attempt to plead around the legal defenses presented” by the

defendant. Id. at *13. Even though the court had previously granted leave to

amend, it awarded sanctions because the “self-contradictory assertions” in the

amended complaint “clearly lack reasonable evidentiary support.” Id. The

conduct alleged here is even worse: Plaintiffs not only changed their story in their

contradicted amended complaint in an attempt to plead around the law, they

continued to pursue the original story in other forums.

Finally, to the extent Plaintiffs are attempting to argue that the District

Court’s Rule 15 order was “law of the case” binding it in the Rule 11 context, that

argument is without merit. The law of the case doctrine provides that “the same

issue presented a second time in the same case in the same court should lead to the

same result.” LaShawn A. v. Barry, 87 F.3d 1389, 1393 (D.C. Cir. 1996). Because

a motion to amend under Rule 15 and a motion for sanctions under Rule 11 do not

present the same issue and are governed by different standards, the law of the case

doctrine has no application. Plaintiffs’ arguments lack merit.

* * *

In sum, Plaintiffs’ attempts to avoid Rule 11 sanctions only underscore the

need for relief. Defendants requested not only dismissal under Rule 11, but also

monetary awards—including the amount of Defendants’ legal fees in defending

this action. The Court should reverse the District Court’s denial of sanctions.


-21-

II. The District Court Should Have Imposed Sanctions Because Plaintiffs Submitted And Continue To Rely On Forged Documents.

The District Court also erred in deeming moot Defendants’ request for

sanctions based on the forged documents. By filing forged documents, Plaintiffs

committed fraud on the court, and this fraud was not mooted by the dismissal of

the case or by Plaintiffs’ claim to no longer rely on the forgeries.

A. The request for sanctions for filing forged documents was not moot.

Plaintiffs offer just a half-hearted defense of the District Court’s mootness

ruling. See RespBR/48-49. Tellingly, they never say why they think the issue was

moot. See id. Nor did the District Court explain this. See JA448-67; JA468-69.

Certainly, the issue of sanctions for filing false evidence is not rendered

moot by dismissal of the case. The law is actually to the contrary. A case or

matter is moot only if no controversy remains and it is “impossible for the court to

grant any effectual relief whatever” based on events during the pendency of a case.

United Bhd. of Carpenters & Joiners v. Operative Plasterers’ & Cement Masons’

Int’l Ass’n, 721 F.3d 678, 687 (D.C. Cir. 2013). There was undeniably a live

dispute remaining over whether Plaintiffs should be sanctioned for filing and

relying on forged documents. Indeed, Defendants requested more than just

dismissal, including monetary relief. See JA98, 100-01. Accordingly, dismissal of

the underlying case does not moot a motion for sanctions. See, e.g., In re

Flanagan, 999 F.2d 753, 760 (3d Cir. 1993) (error to dismiss as moot a sanctions


-22-

motion after disposing of case); Scott v. ADT Security Sys., Inc., 205 F.3d 1334, *1

(4th Cir. Feb. 28, 2000) (per curiam) (unpublished table decision) (same); see also

Fleming & Assocs. v. Newby & Tittle, 529 F.3d 631, 641 (5th Cir. 2008) (courts

impose sanctions to ensure compliance with rules and to discourage bad behavior

even after parties settle case).

Further, federal courts retain jurisdiction to impose sanctions even after the

underlying case has been dismissed because imposing sanctions “is not a judgment

on the merits of an action. Rather, it requires the determination of a collateral

issue: whether the attorney has abused the judicial process, and, if so, what

sanction would be appropriate. Such a determination may be made after the

principal suit has been terminated.” Cooter & Gell v. Hartmarx Corp., 496 U.S.

384, 395-96 (1990); see also Willy v. Coastal Corp., 503 U.S. 131, 132 (1992).

Plaintiffs say they “had no opportunity to rebut” the assertions of forgery or

present their own expert reports, RespBR/5, 49, but that is factually incorrect.

Plaintiffs responded to the assertions of forgery, and they give no indication of

how they were limited in what they could say or attach. JA293-96. In fact, they

attempted to rebut the forgery allegations by attaching an affidavit from Aliyev,

who said he obtained the documents from unnamed sources within Kazakhstan.

JA298-99. Plaintiffs characterized this as “competent evidence” to rebut the

forgery allegations. JA294-95.


-23-

In addition, Plaintiffs’ claim that they never had a chance to obtain expert

reports is far-fetched. Plaintiffs had over two years to present additional evidence

in support of their documents: Defendants moved for sanctions in January 2011,

attaching statements from the alleged authors denying the authenticity of the

documents, and filed expert reports (including from Gideon Epstein) in February

2011 and February 2012 concluding the documents were forged. JA303-06;

JA327-33; JA334-42; JA373-88. No hearing was held on the motion until April

2013. At no time while the motion was pending did Plaintiffs present expert

evidence. Nor did Plaintiffs attempt to defend the documents by introducing

expert testimony in the international arbitrations in which the documents were also

filed. It is not clear what “opportunity” Plaintiffs were waiting for.

Plaintiffs also rely on the fact that they “withdrew reliance” on the forgeries

when they amended their complaint. RespBR/48. First, that claim was untrue

because their suit still necessarily is based on the documents, as discussed in

Defendants’ opening brief and below. See infra Section II.B. Even the District

Court was skeptical of Plaintiffs’ claim. JA462 n.13. Second, Plaintiffs’

disclaimer of reliance could not moot Defendants’ motion because “[i]t is well

settled that a defendant’s voluntary cessation of a challenged practice does not

deprive a federal court of its power to determine the legality of the practice.” City

of Mesquite v. Aladdin’s Castle, Inc., 455 U.S. 283, 289 (1982). Plaintiffs could


-24-

revive their explicit reliance on the documents at any time by re-filing them with a

U.S. court or an international tribunal, so there remains a live controversy. Third,

Plaintiffs’ fraud on the court was complete as soon as the documents were filed,

and they should be sanctioned for it. See Cooter & Gell, 496 U.S. at 395.

Finally, Plaintiffs claim the District Court “was not required to determine

this motion,” RespBR/5, but that reflects a misunderstanding of a federal court’s

duties. Courts have a duty “to say what the law is,” and generally may not decline

to hear cases over which they have jurisdiction. See Vander Jagt v. O’Neill, 699

F.2d 1166, 1170 (D.C. Cir. 1983) (quoting Marbury v. Madison, 5 U.S. (1 Cranch)

137, 177 (1803)); see also Baker v. Carr, 369 U.S. 186, 208 (1962) (absent

jurisdictional or justiciability concerns, litigants are entitled to a decision on their

claims). The sanctions issue relating to forgeries was not moot.

B. Sanctions are warranted based on Plaintiffs’ forged documents.

Contrary to Plaintiffs’ representation below, it is plain that their sole basis

for asserting claims against Defendants is the so-called “Daulbaev memorandum”

described above (see pp. 3-4) and in Defendants’ opening brief (see DefsBR/34

n.9, 63-66). Plaintiffs swore that they filed suit against Defendants on the basis of

this document. See JA279-82; JA289-91. They have never contended otherwise.

See also supra pp. 3-5. There is no way around it: Plaintiffs’ suit is based on the


-25-

forged documents. Sanctions were warranted regardless of their superficial claim

that they would not rely on those documents.

Even if Plaintiffs could belatedly muster support for their claims apart from

the forged documents, their submission of forged documents would be a sufficient

(and compelling) reason for dismissal of the case as a sanction. See Garcia v.

Berkshire Life Ins. Co., 569 F.3d 1174, 1180 (10th Cir. 2009) (“Nor is the

exclusion of the fabricated evidence always enough to deter discovery misconduct.

Litigants would infer that they have everything to gain, and nothing to lose, if

manufactured evidence merely is excluded while their lawsuit continues.”); Aoude

v. Mobil Oil Corp., 892 F.2d 1115, 1117-18 (1st Cir. 1989) (affirming sanctions

where forged documents were “centerpiece” of the case); see also Shepherd v. Am.

Broad. Cos., 62 F.3d 1469, 1479 (D.C. Cir. 1995). “It [is] elementary that a

federal district court possesses the inherent power to deny the court’s processes to

one who defiles the judicial system by committing a fraud on the court.” Aoude,

892 F.2d at 1118. Therefore, regardless of the merits of Plaintiffs’ appeal, this

Court can affirm the dismissal ruling because Plaintiffs’ sanctionable conduct is an

independent and sufficient ground for dismissal. Id. at 1121 (“A malefactor,

caught red-handed, cannot simply walk away from a case, pay a new docket fee,

and begin afresh. … Once a litigant chooses to practice fraud, that misconduct

infects his cause of action, in whatever guises it may subsequently appear.”).


-26-

Indeed, this is not the only time Plaintiffs have relied on forgeries. Some or

all of these documents were filed with the district court in the Caratube discovery

matter, see In re Caratube Int’l Oil Co., No. 1:10-mc-285, Dkt. 32 (D.D.C.)

(Notice of Filing of alleged March 15, 2010 letter from Daulbaev), and with the

ICSID tribunal in Caratube International Oil Company v. Republic of Kazakhstan,

No. ARB/08/12 (ICSID June 16, 2008), see JA432; JA376-77, 382-88; JA328-30,

335-37. Sanctions are necessary to protect the judicial system and to deter

Plaintiffs from using forged documents in future cases.

In addition to dismissal, the Court should instruct the District Court to

impose monetary sanctions against Plaintiffs, including the amount of Defendants’

legal fees in defending this action. See, e.g., Greenburg v. Roberts Props. Ltd.,

246 F. App’x 500, 503 (9th Cir. 2007) (affirming award of attorneys’ fees against

party who submitted forged documents because “the fraudulent conduct for which

sanctions were imposed went to the heart of [the] complaint”); Cobell v. Norton,

214 F.R.D. 13, 22-23 (D.D.C. 2003) (ordering defendants to compensate plaintiffs

for reasonable expenses and fees incurred in responding to false statements in

affidavit in support of defendant’s motion for summary judgment).

III. Deterrence Of Litigation Misconduct Is The Primary Purpose Of Sanctions And Compels Imposition Of Sanctions Here.

This Court should protect the judicial system from Plaintiffs’ machinations.

“[T]ampering with the administration of justice…involves far more than an injury


-27-

to a single litigant. It is a wrong against the institutions set up to protect and

safeguard the public, institutions in which fraud cannot complacently be tolerated

consistently with the good order of society.” Hazel-Atlas Glass Co. v. Hartford-

Empire Co., 322 U.S. 238, 246 (1944), overruled on other grounds, Standard Oil

v. United States, 429 U.S. 18 (1976).

Furthermore, the primary purpose of sanctions is deterrence. See Cooter &

Gell, 496 U.S. at 393. Plaintiffs were clearly undeterred by the District Court’s

strong words about contradictory pleadings, as Devincci subsequently filed his new

arbitration request that again contradicts the amended complaint by asserting that

Dariga was a mere agent in a government expropriation. See Add. Yet Plaintiffs

have continued on in this Court, defending the amended-complaint allegations of

private extortion with Dariga acting on her own behalf. Sanctions are needed.

Respectfully submitted, /s/ Jeffrey L. Oldham Richard W. Beckler [email protected] BRACEWELL & GIULIANI LLP 2000 K Street, N.W., Suite 500 Washington, D.C. 20006 Telephone: (202) 828-5800 Facsimile: (800) 404-3970 Warren W. Harris [email protected] Jeffrey L. Oldham [email protected] BRACEWELL & GIULIANI LLP


-28-

711 Louisiana Street, Suite 2300 Houston, Texas 77002-2770 Telephone: (713) 223-2300 Facsimile: (800) 404-3970 Stephen Sale [email protected] John D. Quinn [email protected] SALE & QUINN, P.C. 1150 17th Street, NW, Suite 305 Washington, DC 20036 Telephone: (202) 872-4713 Facsimile: (202) 887-5137 COUNSEL FOR DEFENDANTS-APPELLEES/CROSS-APPELLANTS ALEXANDER V. MIRTCHEV AND KRULL CORPORATION


-29-

CERTIFICATE OF COMPLIANCE

1. This brief complies with the type-volume limitations of FED. R. APP.

P. 28.1(e)(2)(B) because this brief consists of 6,735 words, excluding the parts of

the brief exempted by FED. R. APP. P. 32(a)(7)(B)(iii).

2. This brief complies with the typeface requirements of FED. R. APP. P.

32(a)(5) and the type style requirements of FED. R. APP. P. 32(a)(6) because this

brief has been prepared in a proportionally spaced typeface using Word 2003 in

14-point Times New Roman font.

/s/ Jeffrey L. Oldham Jeffrey L. Oldham

Attorney for Defendants- Appellees/Cross-Appellants Dated: January 6, 2014


-30-

CERTIFICATE OF SERVICE

In accordance with Fed. R. App. P. 25, I certify that on the 6th day of January

2014, I caused the foregoing Reply Brief of Cross-Appellants to be electronically

filed with the Clerk of the Court for the U.S. Court of Appeals for the District of

Columbia Circuit via the Court’s CM/ECF system. Participants in the case who

are registered CM/ECF users will be served by the Court’s CM/ECF system.

I further certify that on the 6th day of January 2014, I caused the required

number of bound paper copies to be mailed to the Clerk of the Court via overnight

Federal Express.

/s/ Jeffrey L. Oldham Jeffrey L. Oldham
