(Bloomberg) -- The U.S. Supreme Court gets a chance to join the fray over Special Counsel Robert Mueller for the first time this week as the justices consider whether to hear an appeal in a mystery case that’s kept people guessing for months.
The partially redacted appeal, filed by an unidentified foreign government-owned company in a fight over a grand jury subpoena, centers on U.S. courts’ power over businesses owned by foreign governments. It’s the first known effort to get the nation’s highest court to weigh in on Mueller’s probe into Russian meddling with the 2016 election and possible obstruction of justice.
The dispute became a source of intrigue in part because a federal appeals court in Washington closed an entire floor of the courthouse to the public while the case was being argued on Dec. 7. The justices could say on March 25 whether they will take the case or reject it without a hearing.
Details about the dispute remain sketchy. The company has refused to comply with the July 2018 subpoena, and a judge has imposed sanctions that now total more than $2 million and continue to grow by $50,000 a day. What the subpoena is seeking and how it fits into Mueller’s investigation are matters of speculation. The case has been so secret that Mueller’s name didn’t appear publicly in a Supreme Court document until this month.
The unidentified company has an American office where the subpoena was served, and prosecutors contend the company conducts "considerable business" in the U.S., according to an appeals court opinion.
The legal issues are clearer. The company is asking the Supreme Court to rule that the 1976 Foreign Sovereign Immunities Act protects foreign governments and entities they own from being dragged into U.S. criminal cases.
In ruling against the company on a 3-0 vote, the federal appeals court in Washington said the 1976 law, while shielding foreign governments in some contexts, gives American courts authority over them when they are involved in U.S. commercial activity. The court said that power covers civil and criminal cases.
The panel said the company’s argument that it can’t be brought into court would mean that "a foreign-sovereign-owned, purely commercial enterprise operating within the United States could flagrantly violate criminal laws and the U.S. government would be powerless to respond save through diplomatic pressure."
Mueller doesn’t have authority to file briefs at the Supreme Court, but U.S. Solicitor General Noel Francisco is weighing in on the special counsel’s behalf. Francisco is urging the court to reject the appeal, saying no court has ever granted the sweeping sovereign immunity being sought by the company.
The Supreme Court has already refused to block the appeals court decision, and stop the fines from accruing, while the justices decide whether to take up the case. That Jan. 8 rebuff could be a sign the high court isn’t eager to hear the appeal.
Although there is some question about whether the FSIA even applies in criminal cases, there isn’t much debate about the bottom line on immunity, says Ingrid Wuerth, a Vanderbilt Law School professor who specializes in international law and transnational litigation.
The appeals court "seems to have correctly reasoned that the commercial activity exception applies, so that there is no immunity even if FSIA does apply," she said in an email.
Wuerth says a separate issue raised by the company -- whether courts can slap foreign sovereigns with sanctions for not complying with a subpoena -- has more potential. She says lower courts are divided on whether monetary sanctions can be awarded against foreign governments.
But the call for Supreme Court review might be premature, she added. Although the appeals court said the trial judge has power to impose sanctions, the panel didn’t decide whether the money could be collected in this case.
"Waiting might be preferable because the arguments could be developed below and because perhaps the government won’t seek to execute the sanctions award," Wuerth said. "That does not seem likely, but there is a great deal we do not know about the case."
The case is In Re Grand Jury Subpoena, 18-948.
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