White House Urges SCOTUS To Reject Case Over F-35 Sales To South Korea

F-35 Sales To South Korea

The Biden administration has urged the U.S. Supreme Court to reject an appeal by international deals broker Blenheim Capital, alleging exclusion from a multibillion-dollar transaction involving South Korea’s purchase of F-35 fighter jets and a satellite.

The U.S. Justice Department presented the Biden White House’s views on the case in a filing on Tuesday, as requested by the justices.

Blenheim specializes in corporate and governmental deals involving “offsets,” where a buyer receives additional goods or services apart from the core transaction to lower overall costs.

Last year, Blenheim asked the Supreme Court to revive its lawsuit alleging defense giants Lockheed Martin and Airbus conspired to eliminate the company from the South Korea deal. The Justice Department’s filing on Tuesday recommended leaving the lower court ruling intact.

A lawyer for Blenheim at Boies Schiller Flexner did not immediately respond to a request for comment. Lockheed and Airbus, which have denied Blenheim’s claims, and a Justice Department spokesperson declined to comment or did not immediately respond to a comment request.

Blenheim sued South Korea, Lockheed, and Airbus in a Virginia federal court in 2021, alleging violations of U.S. antitrust law and interference with its brokerage arrangement.

The company has since dropped its antitrust claim. The lawsuit stated that Blenheim stood to earn hundreds of millions of dollars for its role in the deal with South Korea, which was buying F-35s from Lockheed and receiving a military satellite as an offset from Airbus. Blenheim was the “offset” broker to Lockheed and helped develop the deal.

The Richmond, Virginia-based 4th U.S. Circuit Court of Appeals upheld the dismissal of Blenheim’s case in 2022. The court ruled that South Korea was immune because the military transaction involved sovereign affairs beyond the reach of U.S. courts. Blenheim argued to the Supreme Court that an exception in federal law for “commercial activity” should overcome South Korea’s immunity shield.

The Justice Department countered that South Korea’s purchase of fighter jets and a military satellite were interconnected and a matter for U.S. government review and approval. “South Korea did not act as a private player in a market when it purchased F-35s and engaged in the connected offset transaction,” the Justice Department said in its filing. Lockheed also urged the justices to uphold the 4th Circuit ruling.