DAVID W. OGDEN

Assistant Attorney General

Civil Division

ROBERT S. MUELLER, III

United States Attorney

DAVID J. ANDERSON

VINCENT M. GARVEY

AMY M. ALLEN

Attorneys, U.S. Department of Justice

Civil Division, Federal Programs Branch

Post Office Box 883

Washington, D.C. 20044

\(202\) 514-4523

Attorneys for the United States

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

In re WORLD WAR II ERA JAPANESE )

FORCED LABOR LITIGATION ) Master MDL Docket No. 1347 VRW

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_)

> )

THIS DOCUMENT RELATES TO: )

> )

*Choe v. Nippon Steel Corporation, et al.,* ) **STATEMENT OF INTEREST
OF**

N.D. Cal. No. CV-99-5309 ) **UNITED STATES OF AMERICA**

*Kim v. Ishikawajima Harima Heavy )*

*Industries, Ltd, et al.,* )

N.D. Cal. No. CV-99-5303 )

*Oh v. Mitsui & Co., Ltd, et al.,* ) Judge: Hon. Vaughn R. Walker

C.D. Cal. No. SACV 00716 DOC (ANx) ) Date: December 13, 2000

*Sin v. Mitsui & Co., Ltd, et al.,* ) Time: 10:00 a.m.

C.A. No. 8:00-436 ) Ctrm: Courtroom 6, 17th Floor

*Su v. Mitsubishi Corporation, et al.,* )

C.D. Cal. No: 2:00-2796 )

*Sung, et al. v. Mitsubishi Corporation, et al.,*)

C.D. Cal. No. CV 00-3175 RSWL (AIJx) )

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_)

On September 21, 2000, this Court held that the claims of Allied
prisoners of war ("POWs") against Japanese corporations for whom they
were forced to perform slave labor were precluded by operation of the
Allies' Treaty of Peace with Japan of September 8, 1951, 3 U.S.T. 3169
(\"Peace Treaty\" or \"Treaty\"). [In re World War II Era Japanese
Forced Labor Litigation]{.underline}, 114 F. Supp. 2d 939, 942 (N.D.
Cal. 2000) ("Order No. 4"). The Court ruled that such claims were waived
pursuant to section 14(b) of the Treaty. [Id.]{.underline} In its
opinion, the Court stated that its September 21, 2000 Order did not
apply to the claims of non-Allied prisoners of war. These non-Allied
claims have been brought primarily by individuals who were Korean or
Chinese nationals during the time of their capture and imprisonment by
Japan.[^1]

**PRELIMINARY STATEMENT**

The United States acknowledges the horrific treatment that non-Allied
civilians and soldiers taken as prisoners by Japan during World War II
received at the hands of the Japanese Imperial forces. Like the Allied
prisoners of war, these individuals were subjected to atrocious and
unspeakable abuse. The United States Government condemns Japan's
treatment of these innocent people in the strongest possible terms.
Nevertheless, the difficulty with entertaining these claims in a U.S.
court over 50 years later is that the post-war settlements -- including
the war crimes trials, the 1951 Peace Treaty and other international
agreements -- already took Japan's lawless conduct into consideration
and held that nation and its leaders accountable. These agreements
represent a framework that if disturbed now, after 50 years, could have
far-reaching consequences for U.S.-Japan relations and Japan's relations
with other countries.

In the Peace Treaty, the Japanese Government recognized its obligations
to pay reparations for the damage and suffering it caused during the
war, and did so by providing reparations to an extent never before seen
in modern times. Under the Treaty, Japan gave the Allied powers that
became parties to Treaty, as well as non-signatory nations such as China
and Korea, the right to seize and dispose of public and private Japanese
assets located within their territories. In return, in Article 14 of the
Treaty, the powers that became parties expressly waived -- on behalf of
themselves and their nationals -- claims arising out of actions taken by
Japan and its nationals during the war. At the strong urging of the
United States, Japan subsequently entered into peace treaties and/or
claims settlement agreements with, [inter alia]{.underline}, South
Korea, the Republic of China (Taiwan), Indonesia and Burma on terms that
essentially mirrored those contained in the 1951 Treaty. The agreements
with South Korea and Taiwan, moreover, were in fulfillment of specific
legal obligations undertaken by Japan in the 1951 Treaty. The 1951
Treaty created a basic framework for the non-judicial resolution of war
claims that, for nearly 50 years, has been adhered to by all states with
war-related claims against Japan. The unambiguous policy purpose of this
process was to put to rest once and for all the issue of Japan's legal
liability for WWII damage claims in the greater interest of regional
peace and security.

Notwithstanding this delicate fabric of international agreements
resolving the matter of claims between the warring nations, the State of
California has attempted to create its own mechanism for dealing with
these very same issues. It has instituted a cause of action that reaches
back 50 years, by waiving the statute of limitations applicable to other
state tort actions, and reopens the carefully considered and
long-resolved issue of Japan's actions during World War II . Much as we
can sympathize with the motives that animated the California legislature
in enacting its statute, it is not for the State of California to
intrude upon the difficult and sensitive foreign policy judgments made
by the United States and other governments in the wake of World War II.
Nor, we believe, should U.S. courts be put in the position of judging
the effects of agreements entered into between two foreign governments,
such as Japan and China or Korea, on the rights of their citizens with
respect to events occurring outside the United States. Any decision as
to whether or not the United States should become involved in
interpreting such agreements should be made by the Executive Branch
after full consideration of the potential diplomatic and political
impact on the United States. Moreover, given the express waiver of
claims by the U.S. in Article 14, it would be inconsistent with the
framework established by the Treaty if U.S. courts were to become a
forum for the nationals of states that did not sign the 1951 Treaty to
bring claims against Japan and/or its nationals stemming from actions
taken in the course of WWII.

In addition, among the stated U.S. purposes for entering the Treaty were
the achievement of finality and security and peace in the region.
Allowing the claims by non-Allied nationals would be inconsistent with
the Treaty's objective of achieving finality on the issue of war-related
claims. It also could have serious implications for stability in the
region. The Japanese Government has stated that its relationships with
China and Korea are very delicate and that such lawsuits could disrupt
relations and ongoing negotiations with those countries.
[See]{.underline} Diplomatic Note from the Embassy of Japan to the U.S.
Department of State, dated November 17, 2000 ("[Note
Verbale]{.underline}") (Exhibit 1).

Finally, the United States must consider the equities involved. Surely
the intent of the United States in entering the Treaty was not to block
our own nationals from receiving compensation in U.S. courts, while
creating a U.S. forum for non-nationals to obtain relief. Such a result
would be totally anomalous, and would manifestly contradict the
overarching purpose of the 1951 Treaty and its ancillary claims
resolution processes.

Under the Treaty regime, these are matters to be decided through
negotiation among the governments involved, not in a United States'
courtroom on the basis of California law. Therefore, although we have
great sympathy for the plaintiffs, the United States believes the claims
of non-Allied plaintiffs held as prisoners of war by Japan are precluded
by the framework established by the Treaty of Peace with Japan of
September 8, 1951, and the California statute on which they are based
impermissibly intrudes on the foreign policy powers of the United States
Government and is preempted by federal law. For these reasons, and the
reasons explained more fully below, plaintiffs' claims should be
dismissed.

**BACKGROUND**

The Allies were painfully aware of the nature and extent of Japanese war
crimes committed against Chinese nationals. The Japanese occupation of
Manchuria dated back to 1931, and the practice of the Japanese
occupation forces repeatedly had been condemned by the Allies.
[See]{.underline}, [e.g.]{.underline}, John W. Dower, [War Without
Mercy: Race and Power in the Pacific War]{.underline}, 38 (1986)
(discussing U.S. State Department condemnation of the bombing of
civilian targets in China in 1930s). At the International Military
Tribunal for the Far East (the "Tokyo trials"), prosecutors presented
voluminous evidence concerning the use of opium trafficking in the 1930s
to raise money for the Japanese war effort, the infamous "Rape of
Nanking" of 1937, and the use of countless Chinese and other Asians as
slave laborers before and during World War II. [See]{.underline} [The
Tokyo Judgment: The International Military Tribunal for the Far East, 29
April 1946-12 November 1948]{.underline}, 386-438 (Dr. B.V.A. Röling &
Dr. C.F. Ruter, eds. 1977). The Allies also were aware that
approximately half of all Japanese-owned assets abroad were located in
China. [See]{.underline} Tetsuo Ito, [Japan's Settlement of the
Post-World War II Reparations and Claims]{.underline}, 37 Japanese Ann.
of Int'l L. 38, 47 (1994). Thus, any meaningful settlement of the issue
of Japanese reparations had to address the issue of Chinese war claims.

At the same time, it was China that presented the biggest obstacle to a
comprehensive settlement, since by 1949 it had become impossible to
determine which political entity legally represented China. By that
time, the People's Republic of China had been established in Beijing,
and Chiang Kai-Shek's Nationalist forces had retreated to the island of
Taiwan, where it established governance as the Republic of China.
[See]{.underline} Marius B. Jansen, [Japan and China: From War to Peace,
1894-1972]{.underline}, 443-44 (1975); [see also]{.underline} [The China
White Paper: August 1949]{.underline} (originally issued as United
States Relations with China With Special Reference to the Period
1944-1949), 311-23 (1967). The U.S. Government continued strongly to
support the Chinese Nationalists, particularly after Chinese Communist
forces launched a major offensive into North Korea in November 1950.
[See]{.underline} William Whitney Stueck, Jr., [The Road to
Confrontation: American Policy Toward China and Korea,
1947-1950]{.underline}, 3-5 (1981). Great Britain, by contrast, favored
recognition of the People's Republic of China. [See]{.underline}
Memorandum of Conversation, by the Deputy Director of the British
Commonwealth and Northern European Affairs (Satterthwaite), Washington,
March 30, 1951, [reprinted in]{.underline} Foreign Relations of the
United States 1951, Vol. VI, Asia and the Pacific, at 953-54 (Exhibit
2); Memorandum of Conversation, by the Deputy to the Consultant
(Allison), Washington, April 5, 1951, [reprinted in]{.underline}
[id.]{.underline} at 964-67 (Exhibit 3).

Since there was no consensus among the Allies as to whether the People's
Republic of China or the Republic of China properly should be a party to
the 1951 Treaty, neither Chinese entity was invited to the San Francisco
Peace Conference, with the understanding that Japan would be left to
decide which government it would recognize. [See]{.underline} Telegram
from the Secretary of State to the United States Political Adviser to
SCAP (Sebald), Washington, May 16, 1951, [reprinted in]{.underline}
[id.]{.underline} at 1044-45 (Exhibit 4); Draft Joint Statement of the
United Kingdom and United States Governments, June 19, 1951, [reprinted
in]{.underline} [id.]{.underline} at 1134 (Exhibit 5). However, the
Senate Foreign Relations Committee later would inform Japanese officials
that the U.S. Senate's approval of the 1951 Treaty was conditioned on
the understanding that the Japanese Government only would conduct
diplomatic relations with the Republic of China. [See]{.underline}
Memorandum by the Consultant to the Secretary (Dulles) to the Secretary
of State, Washington, Dec. 26, 1951, [reprinted in]{.underline}
[id.]{.underline} at 1467-68 (Exhibit 6); [see also]{.underline} [Note
Verbale]{.underline} (Ex. 1).

Korea presented a different but equally complicated set of problems. As
Korea had been under the colonial occupation of Japan since 1910, "the
view of the United States and Japanese governments was that, as part of
the Japanese empire, Korea had fought against the Allies during the
Pacific War and therefore was not eligible for reparations."
[See]{.underline} Sung-Hwa Cheong, [The Politics of Anti-Japanese
Sentiment in Korea: Japanese-South Korean Relations under American
Occupation, 1945-1952,]{.underline} 47 (1991); [see also]{.underline}
U.S. Dep't of State Publications, [Record of Proceedings of the
Conference for the Conclusion and Signature of the Treaty of Peace with
Japan]{.underline}, 84 (1951) (Exhibit 7). Indeed, many of the claims of
Koreans were not considered World War II claims, [per se]{.underline},
but "losses associated with colonial rule." Cheong, [supra]{.underline},
at 54

Korea nevertheless was recognized as having "a special claim on Allied
consideration." [Id.]{.underline} The United States realized that, as
was the case with regard to all other Allied war claims, "any
reparations which might be paid to the Koreans by the Japanese would in
fact come from the United States taxpayers." Memorandum of Conversation,
by the Officer in Charge of Korean Affairs (Emmons), Washington, Jan.
17, 1951, [reprinted in]{.underline} Foreign Relations of the United
States 1951, Vol. VII, Korea and China, Part 1, at 97 (summarizing
remarks of Dean Rusk, Assistant Secretary for Far Eastern Affairs)
(Exhibit 8). Thus, it was crucial to resolve, to the greatest extent
possible, the issue of Korean claims against Japan arising out of both
the war and the colonial occupation; in fact, "\[t\]he American effort
to open a dialogue between the two nations began even before the final
draft of the \[1951\] Treaty was published." Cheong,
[supra]{.underline}, at 100. Dulles initially favored Korea's full
participation as a signatory to the 1951 Treaty. [See]{.underline}
Memorandum of Conversation, by Mr. Robert A. Fearey of the Office of
Northeast Asian Affairs, Tokyo, April 23, 1951, [reprinted
in]{.underline} Foreign Relations of the United States 1951, Vol. VI,
Asia and the Pacific, at 1007 (1977) (Exhibit 9). However, the British
Government so strongly opposed the idea that it eventually was
abandoned. [See generally]{.underline} Cheong, [supra]{.underline}, at
77-98.

As a result of these complications, in the end no Chinese or Korean
political entities signed the 1951 Treaty. In these circumstances,
Article 14(b) of the Treaty, providing for waiver of all Allied claims
against Japan and its nationals, does not cover the PRC, Taiwan, or
North or South Korea. However, the Allies inserted several provisions
into the Treaty that provided for some form of compensation to these
countries. More importantly, the Treaty obligated Japan to enter into
bilateral agreements with these entities on terms similar to those
provided in the Treaty.

Article 26 of the Treaty obligated Japan to enter into a war-claims
settlement with a Chinese political entity within three years. Article
21 of the Treaty stated that China would be entitled to the benefits of
Articles 10 and 14(a). In Article 10, Japan renounced all rights and
interests in China, and Article 14(a) provided for the seizure and
liquidation of assets located in Chinese territory. This was extremely
significant because, as stated above, almost half of all Japanese-owned
assets abroad were located in China.

Article 26 was inserted in the Treaty because of the deadlock between
the British and U.S. Governments over the issue of Chinese
participation. This provision was designed to obligate Japan to enter
into a comprehensive war claims settlement with a Chinese political
entity, without specifying either the People's Republic of China or the
Republic of China. [See]{.underline} Telegram from the Secretary of
State to the Embassy in the Republic of China, Washington, June 21,
1951, [reprinted in]{.underline} Foreign Relations of the United States
1951, Vol. VI, Asia and the Pacific, at 1135-36 (1977) (Ex. 5). Under
the provision, Japan was expected to "conclude with any State which
signed or adhered to the United Nations Declaration of January 1, 1942,
and which is at war with Japan . . . which is not a signatory of the
present Treaty, a bilateral Treaty of Peace [on the same or
substantially the same terms as are provided for in the present
Treaty]{.underline}."[^2] Treaty, Article 26 (emphasis added). This
obligation was to expire within three years of the entry into force of
the 1951 Treaty. Within those three years, Japan did in fact conclude a
bilateral treaty of peace with the Republic of China (Taiwan), on
substantially the same terms as are provided for in the 1951 Treaty.
Treaty of Peace Between the Republic of China and Japan, April 28, 1952,
1858 U.N.T.S. 38 (Exhibit 13). The situation with regard to the People's
Republic of China is slightly different for reasons explained in detail
in the Government of Japan's [Note Verbale]{.underline}. As noted above,
any similar resolution with the People's Republic of China was rendered
virtually impossible by U.S. insistence that Japan not deal with Chinese
Communists. Nonetheless, both the People's Republic of China and the
Government of Japan have made several public statements to the effect
that the issue of war claims was set aside as part of the normalization
of relations between the two nations. [See]{.underline} [Note
Verbale]{.underline} (Ex. 1).

Article 2 of the Treaty required Japan to recognize Korea's independence
and renounce all claim to Korea. Article 21 specifically stated that
Korea would be entitled to certain benefits under the Treaty. Article
4(a) obligated Japan to resolve all claims between Korea and Japan
through "special arrangements between the two governments," and Article
4(b) provided for the Korean Government's seizure of all Japanese-owned
assets in Korea. [See]{.underline} Statement of U.S. Position on
Interpretation of Article 4 of the Japanese Peace Treaty With Respect to
Korean-Japanese Claims Settlement, [reprinted in]{.underline} Documents
on Korean-American Relations 1943-1976, at 146-147 (1976) (Exhibit 14)
("Documents on Korean-American Relations"). This was a significant step
towards the resolution of Korean claims as these assets were, by all
accounts, substantial. By the end of World War II, Japan and its
nationals had acquired 5 billion dollars' worth of assets in Korea,
almost 85 percent of all property in Korea. Cheong, [supra]{.underline},
at 48. When Japanese nationals were repatriated from Korea by U.S.
forces in 1945, they were allowed to take with them only 1000 yen each
and whatever they could carry. [Id.]{.underline} The remainder of the
Japanese assets were frozen by U.S. authorities until October 12, 1948,
when about 90 percent of all such vested property was transferred to the
newly-established Republic of Korea. [Id.]{.underline} at 48-54.

Japan and the Republic of Korea (South Korea) entered into an agreement
as contemplated in Article 4(a) of the Treaty in 1965 following years of
protracted negotiations in which the United States heavily was involved.
[See]{.underline} Agreement on the Settlement of Problems Concerning
Property and Claims and On Economic Cooperation Between Japan and the
Republic of Korea, June 22, 1965, 8473 U.N.T.S. 258 (Exhibit 15); [see
also generally]{.underline} Cheong, [supra]{.underline}, at 99-118
(discussing U.S. role in the negotiations). The terms of this agreement
were greatly influenced by the fact that Korea already had received
substantial compensation under Article 4(b) of the 1951 Treaty, as
discussed above. Cheong, [supra]{.underline}, at 117; [see
also]{.underline} Documents on Korean-American Relations (Ex. 14). The
Japan-ROK agreement is part and parcel of the framework created by the
United States in 1951. A similar agreement between Japan and North Korea
is currently under negotiation, in furtherance of Japan's obligations
under Article 4(a) of the 1951 Treaty.[^3]

**DISCUSSION**

**THE CLAIMS OF THE NON-ALLIED PLAINTIFFS ARE PREEMPTED BY THE TREATY OF
PEACE AND THE FEDERAL GOVERNMENT'S POWER TO MAKE FOREIGN POLICY**

1.  The Claims Of The Non-Allied Plaintiffs Are Preempted By

[The 1951 Treaty Of Peace]{.underline}

State law is preempted where it stands as an obstacle to the
accomplishment and execution of the full purposes and objectives of the
Congress and the President. [Crosby v. National Foreign Trade
Council]{.underline}, 120 S. Ct. 2288, 2294 (2000) (citing [Hines v.
Davidowitz]{.underline}, 312 U.S. 52, 66-67 (1941)). Although Article
14(b) of the Treaty did not extinguish claims of nationals of countries
not party to the Treaty, the United States national policy evidenced by
the text and negotiating history of the Treaty demonstrates an intent on
the part of the U.S. Government to occupy, in the United States, the
entire field of war claims against Japan and its nationals. [Tenney v.
Mitsui & Co., Ltd.]{.underline}, Case No. CV-99-11545, slip op. at 5
(C.D. Cal. Feb. 24, 2000) (J. Marshall) (Exhibit 16). Litigation of
these war claims under the California statute would frustrate the
manifest intent of the Executive Branch and Congress to settle once and
for all the issue of war claims against Japan and its nationals,
regardless of the nationality of the claimant. For that reason, Cal.
Civ. Proc. Code §354.6 is preempted by operation of the Supremacy
Clause. [See]{.underline} [Kolovrat v. Oregon]{.underline}, 366 U.S.
187, 190 (1961); [National Foreign Trade Council]{.underline}, 120 S.
Ct. at 2294 (citing [California v. ARC America Corp.]{.underline}, 490
U.S. 93, 101 (1989)).[^4]

The United States, specifically John Foster Dulles, the lead U.S.
negotiator, was the driving force behind the decision to waive all
Allied claims against Japan in the 1951 Treaty. The United States Senate
gave its advice and consent to the Treaty on March 20, 1952, by a vote
of 66 to 10. The comprehensive scope of the Peace Treaty\'s waiver of
claims, as well as the remedial scheme created by the War Claims Act,
the mechanism the United States created to compensate American POWs,
demonstrates that the federal government has occupied the field with
respect to prisoner of war claims against the Japanese and has left no
room for the States to supplement it. [United States v.
Locke]{.underline}, 120 S. Ct. 1135, 1149 (2000); [Worth v. Universal
Pictures, Inc.]{.underline}, 5 F. Supp. 2d 816, 820 (C.D. Cal. 1997).

The 1951 Treaty created the framework for bringing closure to World War
II claims against Japan and its nationals. In drafting the Treaty, the
Allies took pains not only to address settlement of their own
war-related claims with Japan, but those of non-signatory nations as
well. As discussed above, the Allies inserted several provisions into
the Treaty that provided for some form of compensation to these
countries. [See]{.underline} Treaty, Articles 2, 4, 10 , 14 and 21. In
addition, the Treaty obligated Japan to enter into bilateral agreements
with these entities on terms similar to those provided in the Treaty.
[Id.]{.underline}, Articles 4 and 26. The Allies' intent was to effect
as complete and lasting a peace with Japan as possible in order to allow
Japan as a nation to rebuild its economy and become a stable force and
strong ally in Asia. [See]{.underline} Japanese Peace Treaty and Other
Treaties Relating to Security in the Pacific, S. Exec. Rep. No. 82-2, at
2-3 (Exhibit 17); [Aldrich v. Mitsui & Co. (USA)]{.underline}, Case No.
87-912-Civ-J-12, slip op. at 3 (M.D. Fla. Jan. 20, 1988) (Exhibit 18).
To that end, the United States actively facilitated and encouraged
Japan's efforts to enter into peace treaties and/or claims settlement
agreements with non-signatory nations such as China, Korea, Burma and
Indonesia.

However, the international community, led by the United States,
recognized that full payment for all damages was impossible if a
\"viable economy\" were to be created in Japan. [See]{.underline}
Treaty, Article 14(a); S. Exec. Rep. No. 82-2, at 12 (Ex. 17). It
therefore was understood and accepted that it would be "the duty and
responsibility of each government to provide such compensation for
persons under its protection as that government deem\[ed\] fair and
equitable." S. Exec. Rep. No. 82-2, at 13 (Ex. 17). Although the Treaty
unequivocally required Japan to compensate signatory as well as
non-signatory nations for war losses, the Treaty's waiver provisions
placed the burden of ensuring that individual claimants were compensated
back on the home governments of those citizens. The United States
responded to this call by seizing Japanese assets, placing them into the
War Claims Fund established pursuant to the War Claims Act, 28 U.S.C. §§
2001-2017, and distributing them through the War Claims Commission.
Congress rejected an alternative proposal that would have allowed
federal courts to adjudicate war compensation claims. 94 Cong. Rec. at
564 (1948) (Exhibit 19). Congress even barred judicial review of the War
Claims Commission\'s decisions \"by mandamus or otherwise.\" 50 U.S.C.
App. § 2010 (1994). It was not the intent of the President and Congress
to preclude Americans from bringing their war-related claims against
Japan and Japanese nationals in U.S. courts, but allow federal or state
courts to serve as a venue for the litigation of similar claims between
third-parties. Such a result would be at odds with the overarching
purpose and application of the Treaty.

The federal government, "in the exercise of its superior authority in
\[the field of foreign relations\], has enacted a complete scheme of
regulation" to address World War II related claims against Japan and its
nationals. [Hines]{.underline}, 312 U.S. at 66. California cannot now
"inconsistently with the purpose of Congress, conflict or interfere
with, curtail or complement, \[that\] federal law.\" [Id.]{.underline};
[see]{.underline} [also]{.underline} [Pacific Gas & Elec. Co. v. State
Energy Resources Conservation & Dev. Comm\'n]{.underline}, 461 U.S. 190,
204 (1983); [Beveridge v. Lewis]{.underline}, 939 F.2d 859, 862 (9th
Cir. 1991). Because Cal. Civ. Proc. Code §354.6 interferes with
long-standing foreign policy judgements centering around the 1951 Peace
Treaty, it necessarily is preempted. [United States v.
Pink]{.underline}, 315 U.S. 203, 230-31 (1942) (\"state law must yield
when it is inconsistent with or impairs the policy or provisions of a
treaty or of an international compact or agreement");
[Hines]{.underline}, 312 U.S. at 66; [Bethlehem Steel Corp. v. Board of
Comm'rs of the Dep't of Water and Power of the City of Los
Angeles.]{.underline}, 276 Cal. App. 2d 221, 225-26 (1969). If state
laws and policies did not yield before the exercise of the external
powers of the United States, then our foreign policy might be thwarted,
and there would be "great potential for disruption or embarrassment" of
the United States in the international arena. [Zschernig v.
Miller]{.underline}, 389 U.S. 429, 435 (1968). In this instance, it goes
beyond the "potential" for embarrassment. The Government of Japan
affirmatively has stated that it could disrupt U.S. relations with
Japan. [See]{.underline} [Note Verbale]{.underline} (Ex. 1).

> **B. The California Statute Impermissibly Intrudes On The Foreign
> Policy Powers**

**[Of The United States Government]{.underline}**

The Supreme Court long has recognized that the Constitution generally
entrusts the Federal Government \"with full and exclusive responsibility
for the conduct of affairs with foreign sovereignties.\" [Hines v.
Davidowitz]{.underline}, 312 U.S. 52, 63 (1941). As the Supreme Court
has made clear, \"\[p\]ower over external affairs is not shared by the
States; it is vested in the national government exclusively.\" [United
States v. Pink]{.underline}, 315 U.S. 203, 233 (1942); [Banco Nacional
de Cuba v. Sabbatino]{.underline}, 376 U.S. 398, 423-25 (1964); [United
States v. Belmont]{.underline}, 301 U.S. 324, 331-32 (1937); [United
States v. Curtiss-Wright Export Corp.]{.underline}, 299 U.S. 304, 316
(1936); [Chae Chan Ping v. United States]{.underline}, 130 U.S. 581,
604-05 (1889); [Bethlehem Steel Corp. v. Board of Comm'rs of the Dep't
of Water and Power of the City of Los Angeles]{.underline}, 276 Cal.
App. 2d 221, 225 (1969).

The Framers of the Constitution recognized that the actions of a State
could embroil the entire nation in conflict with another country.
Recognition that \"\[t\]he Union will undoubtedly be answerable to
foreign powers for the conduct of its members,\" caused the Framers to
propose a Constitution that provided for a single national voice over
foreign political and commercial affairs, in order to preserve \"\[t\]he
peace of the whole.\" The Federalist No. 80, at 476 (Alexander
Hamilton); [see also]{.underline} The Federalist No. 42, at 264 (James
Madison) (\"If we are to be one nation in any respect, it clearly ought
to be in respect to other nations\"); [Chy Lung v. Freeman]{.underline},
92 U.S. 275, 279-80 (1875).

In light of the \"imperative\[\] . . . that federal power in the field
affecting foreign relations be left entirely free from local
interference,\" [Hines]{.underline}, 312 U.S. at 63, the Supreme Court
has held that state \"regulations must give way if they impair the
effective exercise of the Nation\'s foreign policy.\" [Zschernig v.
Miller]{.underline}, 389 U.S. 429, 440 (1968). The question is
[not]{.underline} simply whether federal law affirmatively and
explicitly has preempted a state regulation: a state policy that
disturbs foreign relations must give way \"even in \[the\] absence of a
treaty\" or federal statute. [Id.]{.underline} at 441. Nor is it a
question of \"balanc\[ing\] the nation\'s interest in a unified foreign
policy against the particular interests of an individual state\";
rather, \"there is a threshold level of involvement in and impact on
foreign affairs which the states may not exceed.\" [National Foreign
Trade Council v. Natsios]{.underline}, 181 F.3d 38, 52 (1st Cir. 1999),
[aff\'d on other grounds]{.underline}, 120 S. Ct. 2288, 2296 (2000). In
many ways, Cal. Civ. Proc. Code § 354.6 is similar to the California's
Holocaust Victim Insurance Relief Act ("HVIRA"), the constitutionality
of which successfully was challenged in [Gerling Global Reins. Corp. of
Am. v. Quakenbush]{.underline}, 2000 WL 777978 (E.D. Cal. June 9, 2000),
[appeal pending]{.underline}, in part on the basis of
[Zschernig]{.underline}. The court found, in issuing a preliminary
injunction, that the HVIRA affected international relations, conflicted
with the national government's policies, and had the potential for
disruption or embarrassment. [Id.]{.underline} at \*8 (citing
[Zschernig]{.underline}, 389 U.S. at 443). According to the
[Gerling]{.underline} court, it is not necessary for there to be a
formally stated federal policy for a state to impermissibly interfere
with foreign affairs, a state statute that affects foreign relations in
a "persistent and subtle way" is enough. [Id.]{.underline} at \*9
(quoting [Zschernig]{.underline}, 389 U.S. at 440). The court also held
that the fact that the statute purported to affect foreign companies,
not foreign governments, was immaterial. [Id.]{.underline}

Similarly, Cal. Civ. Proc. Code § 354.6 is an unconstitutional intrusion
into the federal government's foreign affairs powers. First, the
California forced labor statute explicitly admits to a foreign policy
objective.[^5] It was not designed to address commercial disputes
between parties over back wages or breaches of employment contracts;
rather, it clearly contemplates the litigation of war-related claims,
defining the victims covered by the statute as "Second World War slave
labor victim(s)." The purpose of the statute is to provide redress
against "the Nazi regime, its allies and sympathizers" for injustices
arising out of WW II. California is doing nothing less than second
guessing the difficult and complex decisions made by the United States
after World War II to resolve the issue of claims spawned by that
conflict.

Second, Cal. Civ. Proc. Code §354.6, as we have shown above, would
frustrate the federal policy established by the 1951 Peace Treaty of
fostering resolution of all war claims against Japan by state-to-state
negotiations, a policy that has been in effect for half a century.
Rather than bringing closure on war claims against Japan and its
nationals -- the purpose of the 1951 Treaty -- the California statute
instead abrogates the ordinary rules that apply to California state tort
claims, such as statutes of limitation, and singles out these claims for
special consideration. Such a statutory regime could result in a
case-by-case adjudication of war-related claims, possibly based on 50
different state statutory schemes.[^6] The United was the driving force
behind the decision to waive all Allied claims against Japan in the 1951
Treaty. It did so to fulfill fundamental U.S. foreign policy and
national security goals. The Peace Treaty, along with a bilateral
security agreement the United States entered into with Japan on the same
day the Peace Treaty was signed, forms the basis of U.S.-Japan
relations, and has been the very cornerstone of our country's foreign
policy and regional security in East Asia and the Pacific. The
California statute seeks to undo that foreign policy, which has
benefitted the [entire]{.underline} country for the last 50 years, by
reopening claims that have long since been resolved. One state cannot be
permitted to unilaterally overturn U.S. national foreign policy in such
a manner. [See]{.underline}, [e.g.]{.underline} [United
Pink]{.underline}, 315 U.S. at 233; [Belmont]{.underline}, 301 U.S. at
331-32; [Bethlehem Steel Corp.]{.underline} 276 Cal. App. 2d at 225.

In Article 14 of the 1951 Treaty, the Allied nations expressly waived --
on behalf of themselves and their nationals -- claims arising out of
actions taken by Japan and its nationals during the war. Allowing United
States' courts to become a forum for aliens around the world to bring
claims against Japan and/or its nationals stemming from actions taken in
the course of WWII would be inconsistent with the framework established
by the Treaty. This decision by the federal government is entitled to
substantial deference because, "when foreign affairs are involved, the
national interest has to be expressed through a single authoritative
voice." [See]{.underline} [United States v. Li]{.underline}, 206 F.3d
56, 67 (1st Cir.) (Selya, J., concurring), [cert. denied]{.underline},
121 S. Ct. 379 (2000); [Curtiss-Wright Export Corp.]{.underline}, 299
U.S. at 320; [accord]{.underline} [Department of Navy v.
Egan]{.underline}, 484 U.S. 518, 529 (1988); [Haig v. Agee]{.underline},
453 U.S. 280, 293-94 (1981); [Alfred Dunhill of London, Inc. v. Republic
of Cuba]{.underline}, 425 U.S. 682, 705-06 n.18 (1976); and [United
States v. Louisiana]{.underline}, 363 U.S. 1, 35 (1960).

California\'s approach risks frustrating the federal government's
ability to speak with one voice as \"the sole organ of the nation in its
external relations, and its sole representative with foreign nations.\"
[Curtiss-Wright Export Corp.]{.underline}, 299 U.S. at 319. By enacting
the statute, California has created its own policy in a particular area
of foreign relations -- one which judges the activities of foreign
governments and corporations during the World War II, and the treaties
and agreements Japan and other nations made in the wake of the war. If
each State were free to impose burdens that diverge from the foreign
policy interests of the nation as a whole as expressed by the President
and to have its own foreign policy, it would, as the Supreme Court has
noted, significantly diminish the President\'s \"economic and diplomatic
leverage\" and, hence, his authority to negotiate agreements with
foreign governments. [See]{.underline} [National Foreign Trade
Council]{.underline}, 120 S. Ct. at 2296.

**CONCLUSION**

As this Court noted in its September 21, 2000 Opinion (Order No. 4), the
fundamental goal of the United States in negotiating the 1951 Treaty was
"to settle the reparations issue [once]{.underline} [and for
all]{.underline}" because "it was well understood that leaving open the
possibility of future claims would be an unacceptable impediment to a
lasting peace." 114 F. Supp. 2d at 946 (emphasis added). However, rather
than allowing that peace to last, California is attempting to overturn a
United States foreign policy decision made decades ago that has served
U.S. security interests in Asia and supported peace and stability in the
region for over 50 years. California also is creating a system that will
place U.S. courts in the position of interpreting treaties and
agreements between foreign powers affecting the rights of non-nationals
with respect to events that occurred outside the United States over 50
years ago. In the process, California potentially will be jeopardizing
relations between the United States and Japan and Japan and its Asian
neighbors. For the reasons stated above, Cal. Civ. Proc. Code §354.6
impermissibly intrudes on the foreign policy powers of the federal
government and is preempted by the 1951 Treaty of Peace with Japan.

Accordingly, the United States respectfully submits that the claims
raised by the plaintiffs should be dismissed.

Respectfully submitted,

Of Counsel:

JAMES G. HERGEN

LARA A. BALLARD

United States Department of State

Office of the Legal Adviser

Washington, D.C. 20037

Dated: December 6, 2000

DAVID W. OGDEN

Asistant Attorney General

ROBERT S. MUELLER, III

United States Attorney

­­­­­­­­­­­­­­­­

DAVID J. ANDERSON

VINCENT M. GARVEY

AMY M. ALLEN

U.S. Department of Justice

Civil Division, Federal Programs Branch

P.O. Box 883

901 E Street, N.W., Room 860

Washington, D.C. 20044

\(202\) 514-4523

Attorneys for the United States

[^1]: ^[?]{.underline}^/ There is also a pending motion to dismiss the
    claims of Filipino forced laborers. The United States has not
    submitted a separate Statement of Interest concerning these claims
    because it believes they are covered by the Court's Order No. 4. The
    Philippines was a signatory to the 1951 Treaty of Peace and
    therefore the Filipino claims should be treated identically to the
    Allied claims.

[^2]: ^[?]{.underline}^/ Significantly, all of Japan's post-1951
    bilateral settlement agreements have adhered to the same basic
    framework established in the 1951 Treaty: a comprehensive
    non-judicial resolution of all war claims, using the proceeds of
    liquidated Japanese assets located abroad, with substantial foreign
    aid packages provided to the developing Asian nations formerly
    occupied by Japan. Even some of the Allies that attended the San
    Francisco Conference but did not sign or ratify the Peace Treaty due
    to then-existing domestic political pressures, most notably Burma,
    eventually reached bilateral settlement agreements with Japan that
    contained these same basic attributes. [See]{.underline},
    [e.g.]{.underline}, Treaty of Peace Between the Union of Burma and
    Japan, Nov. 5, 1954, Art. 5, 3542 U.N.T.S. 202 (Exhibit 10); [see
    also]{.underline} Treaty of Peace Between Japan and the Republic of
    Indonesia, Jan. 20, 1958, Art. 4, 4688 U.N.T.S. 235 (Exhibit 11).
    Nearly all such agreements were brought about in large part with the
    active involvement of the U.S. Government. [See]{.underline},
    [e.g.]{.underline}, Memorandum of Discussion at the 214^th^ Meeting
    of the National Security Council Held on Sunday, September 12, 1954,
    [reprinted in]{.underline} Foreign Relations of the United States
    1952-1954, Vol. XII, East Asia and the Pacific, Part 1, at 907
    (1977) (Dulles reporting to the National Security Council his
    efforts to convince the Japanese Government to accept Burma's
    proposal for a war claims settlement) (Exhibit 12).

[^3]: ^[?]{.underline}^/ Japan's obligations under Article 4(a) runs
    independently of its Article 26 obligations, and is not subject to
    the three-year limitation.

[^4]: ^[?]{.underline}^/ An international treaty to which the United
    States is a party is the \"supreme law of the land\" and may preempt
    state law claims as fully as an act of Congress. U.S. Const. Art.
    VI, ¶2; [see]{.underline} [also]{.underline} [Air France v.
    Saks]{.underline}, 470 U.S. 392, 406 (1985); [Missouri v.
    Holland]{.underline}, 252 U.S. 416, 434-35 (1920); [In re Aircrash
    in Bali, Indonesia,]{.underline} 684 F.2d 1301, 1307-08 (9th Cir.
    1982).

[^5]: ^[?]{.underline}^/ Any Second World War slave labor victim, or
    heir of a Second World War slave labor victim, Second World War
    forced labor victim, or heir of a Second World War forced labor
    victim, may bring an action to recover compensation for labor
    performed as a Second World War slave labor victim or Second World
    War forced labor victim from any entity or successor in interest
    thereof, for whom that labor was performed, either directly or
    through a subsidiary or affiliate. That action may be brought in a
    superior court of this state, which court shall have jurisdiction
    over that action until its completion or resolution.

    Cal. Civ. Proc. Code § 354.6.

[^6]: ^[?]{.underline}^/ Entertaining these lawsuits not only presents
    difficulties of federalism, but also of separation of powers.
    Consideration of these claims also would require U.S. courts to pass
    on the sufficiency of other countries' agreements with Japan and
    those countries' reasons for entering agreements with Japan. Japan
    has entered into, or is in the process of negotiating, war-claims
    settlement and/or peace agreements with China and the two Koreas
    that emerged after WWII. The United States actively has encouraged
    and facilitated these agreements and negotiations. Whether the
    United States shall attempt to interpret agreements between two
    foreign powers affecting the rights of foreign nationals with
    respect to events that occurred outside the United States is
    quintessentially a question for the Executive Branch, not one for
    the courts.