NSO Group Continues to Fight WhatsApp Victory at Supreme Court in Phone Malware Case

Appellants NSO Group Technologies Limited and Q Cyber Technologies Limited have asked the Ninth Circuit to stay the issuance of its mandate until they file and the Supreme Court resolves their petition for writ of certiorari. In a motion filed on Wednesday, NSO argues that the case presents an important question that has created division among the federal Courts of Appeal, entitling it to a stay.

The case concerns Facebook-owned WhatsApp’s suit against NSO after it purportedly sent malware through WhatsApp to around 1,400 mobile phones aiming to spy on users. The complaint alleges Computer Fraud and Abuse Act, California Comprehensive Computer Data Access and Fraud Act, breach of contract, and other common law causes of action.

NSO sought to shield itself from liability using the cloak of sovereign immunity and claiming that because it works with foreign governments, it may assert conduct-based immunity, which protects agents of foreign sovereigns from suit in U.S. courts. The district court declined the argument, and in November, the Ninth Circuit affirmed.

Most recently, NSO asked for a rehearing en banc, but the appellate court rejected its offer on January 6. Now, the appellants contend that the Ninth Circuit went too far and reached a conclusion that no other court has adopted insofar as it held that the Foreign Sovereign Immunities Act (FSIA) entirely supplants common-law immunity for private entities.

NSO asserts that the current holding “undermines the United States’ and other countries’ ability to employ private contractors to assist in performing sovereign activities, and it establishes a precedent that could expose the United States’ tens of thousands of contractors to lawsuits in foreign courts for conduct undertaken on behalf of the United States.”

In addition, NSO says the decision diverges from those of the Fourth and D.C. Circuits and the Supreme Court’s 2010 decision Samantar v. Yousuf, which NSO reads to hold that the FSIA does not displace common-law conduct.

NSO explains that a stay is particularly important, because without it, NSO will have to litigate its case while its certiorari petition is pending. “That would effectively deprive NSO of the immunity to which it claims to be entitled by imposing the ‘burdens of litigation’ that sovereign immunity is designed to avoid.”

WhatsApp and Facebook are represented by O’Melveny Myers LLP. NSO Group and Q Cyber Technologies are represented by King & Spalding LLP.