Comparative US /EU jurisdiction material: Mitchell v. DePuy Orthopaedics (Missouri); and KGS v Facebook (Alabama).

Thank you Stephen McConnell for flagging Mitchell v. DePuy Orthopaedics, Inc., 2019 U.S. Dist. (Missouri) and Alani Golanski for doing the same for KGS v Facebook at the Alabama Supreme Court,

Both cases have plenty of scope for comparative analysis viz EU law and non-US common law. Which is why I had pondered them for use in exam essays but in the end did not – they might come in handy at a later stage. 

Readers best refer to the reports linked above for a full picture. In short, Mitchell involves the minimum contacts rule as well as ‘directing activities towards forum residents’: both have clear echos (and differences) in EU jurisdictional rules. On neither ground was specific (what the EU would call ‘special’) jurisdiction upheld.

In the Facebook case, Facebook argument is included on p.10-11. Claimant put forward a case for jurisdiction on p.13-14. She argues i.a. effects doctrine. Bryan J discussed both extensively p.15 ff and held that doing business in Alabama is not sufficient for personal jur., and (p.39) Facebook engagement with complaints not enough for specific jurisdiction.

In both cases the US Supreme Court’s decision in Bristol-Myers Squibb is cited as highly relevant authority.

Geert.

Jesner v Arab Bank. Scotus does not play ball on corporate culpability under international law.

For background to this week’s SCOTUS ruling in  Jesner v Arab Bank see my earlier posting. Bastian Brunk has early reflection here, with good summary of the Court’s majority (as well as dissenting) opinion.

Human rights litigation under ATS is not dead. Yet it is clear it is not going to be routine, either. I find the judgment not surprising. While one could certainly from a political point of view bemoan that ATS is not providing the avenue to hold corporate excess to account,  SCOTUS have a point when

  • they emphasise the foreign policy intentions of the ATS when it was originally drafted. Hence the need not to ignore the same foreign policy implications 2 centuries on. Hence also my stance on JASTA.
  • they highlight the continuing de lega lata situation on corporate culpability under international law: the default position remains that corporations are not subjects of public international law. Yes there are hard-core exceptions – and these may be further developing. And yes, plenty over the past 20 years have tried to  change that status quo. Finally the Court could have flagged more of those attempts that raise serious doubt over the position. However it is hardly the role of the US Supreme Court single-handedly to force the hand of the league of nations.
  • separation of powers in the US, too, demands Congress intervene should it want the Statute’s causes of action to be broadened.

All in all a ruling very much in Montesquieu’s spirit. Students of public international law in particular should read the judgment with care: there is plenty in there to chew over.

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 8, Heading 8.2.

Extraterritorial application of warrants: Our amicus curiae brief in the Microsoft Ireland case.

Update 3 April 2018 Recently, the so-called “CLOUD Act” was passed by Congress and signed into law.  This new law amends the Stored Communications Act to give it a potentially extraterritorial reach.  Following this development, the U.S. Government has moved to have the Microsoft case dismissed as moot, and to have the Second Circuit’s decision vacated. [Technically, Congress has enacted, and the President has signed,
the Consolidated Appropriations Act, 2018, H.R. 1625, 115th Cong., 2d Sess. (2018). Division V of that Act is called the Clarifying Lawful Overseas Use of Data Act, or the CLOUD Act. TheCLOUD Act amends the Stored Communications Act, 18 U.S.C. 2701-2712, by adding 18 U.S.C. 2713, which now states:
A provider of electronic communication service or remote computing service shall
comply with the obligations of this chapter to preserve, backup, or disclose the contents
of a wire or electronic communication and any record or other information pertaining to a customer or subscriber within such provider’s possession, custody, or control, regardless of whether such communication, record, or other information is located within or outside of the United States.]

For background to the Microsoft  Ireland case under the Stored Communications Act (SCA), see here. The issue is essentially whether the US Justice Department may force Microsoft to grant access to e-mails stored on Irish servers.

With a group of EU data protection and conflicts lawyers, we have filed an amicus curiae brief in the case at the United States Supreme Court last week, arguing that the Court should interpret the SCA to apply only to data stored within the United States, leaving to Congress the decision whether and under what circumstances to authorize the collection of data stored in other countries.

There is not much point in me rehashing the arguments here: happy reading.

Geert.

 

 

SCOTUS holding in Bristol-Myers Squibb BMS further restricts personal jurisdiction in State courts.

Update 18 October 2019 BMS was applied in Slemp v Johnson & Johnson.

I have reported before (search tag ‘CSR’ or ‘ATS) on the personal jurisdiction cases in US litigation. The United States Supreme Court this morning held in Bristol-Meyers Squibb, BMS for short. For background see earlier reporting in this post. California was held not to have jurisdiction for claims brought by non-residents. In her dissenting Opinion justice Sotomayor notes the important impact of the ruling, suggesting that a corporation that engages in a nationwide course of conduct cannot now be held accountable in a state court by a group of injured people unless all of those people were injured in the forum State.  Precedent evidently includes Bauman.

Judgment and opinion include many interesting takes on personal jurisdiction and how it should be managed.

Kenneth Argentieri and Yuanyou (Sunny) Yang have an interesting suggestion here, that ‘plaintiffs will continue to develop creative arguments to obtain jurisdiction over defendants in their preferred jurisdictions, for example, by arguing that a corporation’s registration to do business in a state or designation of an agent to accept service in a state constitute consent to the jurisdiction in that state. Circuit and state courts are currently split on this issue, and the United States Supreme Court has not yet ruled on it.’ We are not a the end of the personal jurisdiction road.

Geert.

 

Jesner v Arab Bank. Corporate culpability, the substantive question ignored in Kiobel, makes certiorari.

Update 13 October 2017: Oral hearing took place this week. See here for reporting in particular on Gorsuch J’s unexpected line of questioning.

Thank you, Ludo Veuchelen, for alerting me to Adam Liptak’s reporting on Jesner v Arab Bank, in which certiorari was granted by the United States Supreme Court early April. The case may finally have us hear SCOTUS’ view on the question which led to certiorari in Kiobel but was subsequently ignored by the Court: whether corporations can be culpable for violation of public international law. ‘May’ is probably the keyword in the previous sentence.

Update 18 January 2018 One thing to look out for is whether SCOTUS will refer to developments in ICSID /World Bank arbitration, particularly Urbaser v Argentina where the Panel noted at 1195

‘it can no longer be admitted that companies operating internationally are immune from
becoming subjects of international law. On the other hand, even though several initiatives undertaken at the international scene are seriously targeting corporations human rights conduct, they are not, on their own, sufficient to oblige corporations to put their policies in line with human rights law. The focus must be, therefore, on contextualizing a corporation’s specific activities as they relate to the human right at issue in order to determine whether any international law obligations attach to the non-State individual.’

Geert.

(Handbook of) EU Private international law, 2nd ed. 2016, Chapter 8, Heading 8.2.

 

Who am I? USSC to rule on a trust’s citisenship in AMERICOLD LOGISTICS.

Update May 2016 the USSC held in March 2016. It held ‘ For purposes of diversity jurisdiction, Americold’s citizenship is based on the citizenship of its members, which include its shareholders.’. I confess I do not know what that means – no doubt others do.

One night this week I was teaching a taster class to final year secondary school students (17-18yr olds). I decided I should make it challenging enough. This, I surmised, would help all those present. Either they would now run a mile from Law School, never to look back (thus taking away all doubt). Or their curiosity would be tickled enough for them to want to learn more (thus for them, too, taking away all doubt). I settled on CSR and conflicts: the Shell Nigeria case, with links to Kiobel (and Adam Smith, David Ricardo; special purpose vehicles; and the impending merger between Leuven’s AB Inbev and SAB Miller. All very exciting stuff!, in an allocated tome slot of 30 minutes). I hope readers will agree that conflict of laws does just the trick referred to above: scare off the doubters; pull in the doubters.

Anyways, that class was at the back of my mind as I was reading up on Americold Logistics. I am not a US trained or US qualified lawyer hence this posting may not be howler-proof however I understand that one particular avenue to gain access to US federal courts (as opposed to State courts; and over and above the issue being an issue based on federal law), is so-called ‘diversity jurisdiction’. This means the federal courts can hear a case if the citisenship of the parties involved is diverse: i.e. of at least two different US States or one of them being foreign. I also understand that to determine corporate citisenship, reference is made to the principal place of business (not therefore generally co-inciding with place of incorporation).

But how about trusts? What identity does a trust have with a view to diversity jurisdiction? In Americold Logistics, the Tenth Circuit sua sponte queried whether there was full diversity of citizenship among the parties. In particular, the judges challenged whether the citizenship of Americold Realty Trust, a business trust, should be determined by reference to its trustees’ citizenship, or instead by reference to some broader set of factors. This issue has deeply split courts across the country. Joining the minority of courts, the Tenth Circuit held the jurisdictional inquiry extends, at a minimum, to the citizenship of a trust’s beneficiaries in addition to its trustees’ citizenship. In this case, doing so destroyed diversity of citizenship among the parties. The issue is disputed, following relevant (seemingly inconclusive) precedent, summarised by SCOTUS here.  The USCC has now granted certiorari.

This judgment will be of quite some relevance to US legal (trust) practice. I think readers will agree that it was wise not to pick it, and the wider issue of trust identity, for lawyers in spe.

Geert.

Doe v Nestle and Tiffany v China Merchants Bank et al: The concertina effect of the Alien Torts Statute

Update 27 May 2020 thank you Russell Hopkins for flagging the US Government amicus curiae brief on this (and the Cargill) case.

Update 8 July 2019 for the latest in the Doe v Nestle case see the Court of Appeals for the Ninth circuit here. The majority held that held that plaintiffs allege concrete and redressable injury that was fairly traceable to the challenged conduct of one defendant, and their allegations against another defendant were sufficient to allow a final opportunity to replead. This gives them enough standing for the case to continue on the merits.

I may yet have to insert a special category ‘ATS’ in the ‘Categories’ on the right hand side of this blog. Distinguishing, and precedent application alike keep on stretching cq enforcing the USCC’s decision in Kiobel.

On the precedent side of the debate,  Tiffany v China Merchants Bank et al , the US Second Circuit Court of Appeals took the application of Kiobel in Daimler as cue for a refusal of the recognition of Asset Restraints and Discovery Orders against a Bank with merely branch offices in New York. The Bank’s sites of incorporation and principal places of business are all outside of the US. With reference to Daimler, the Court held that there is no basis on which to conclude that the Bank’s contacts in New York are so ‘continuous and systematic’ judged against their national and global activities, that they are ‘essentially at home’ in the State.

The Ninth Circuit Court of Appeals in Doe v Nestle reversed the lower court’s decision to dismiss ATS claims and arguably indeed adopted an extensive view of ‘aiding and abetting’ within the context of ATS: ‘Driven by the goal to reduce costs in any way possible, the defendants allegedly supported the use of child slavery, the cheapest form of labor available. These allegations explain how the use of child slavery benefitted the defendants and furthered their operational goals in the Ivory Coast, and therefore, the allegations support the inference that the defendants acted with the purpose to facilitate child slavery.’ : these allegations were considered to even meet the supposedly stricter ‘purpose’ test. Defendant’s market power and control over operations abroad seemed to have played an important role.

Applicants have now been allowed to re-plead given the intervening judgments by the USSC (the Doe v Nestle case has been running for a while)- watch this space, yet again.

Geert.

‘Apartheid’ dismissed and Al-Shimari distinguished: The bar is high for the ATS’ touch and concern test

For readers unfamiliar with earlier posts on the Alien Torts Statute and its role in the corporate social responsibility debate, the title of this piece may sound like gobbledygook. Review of the interim ruling in Apartheid probably helps. As I noted in that piece, Scheindlin USDJ instructed counsel to brief on the ‘touch and concern’ test put forward by the Supreme Court in Kiobel, with the warning that they must show in particular that the companies concerned acted ‘not only with the knowledge but with the purpose to aid and abet the South African regime’s tortious conduct as alleged in these complaints’.

Having now reviewed those extra briefs, she has decided that the high bar set by the USCC in Kiobel was not met in current case. She distinguished (at p.18) the case from Al-Shimari, for the alleged violation of international law was inflicted by the South African subsidiaries of the US defendant corporations, over whom defendants may have exercised control however control alone, it transpires, is not enough to create sufficient link with the US to meet the Kiobel test.

Applicants had previously already argued that critical policy level decisions were made in the US, and that the provision of expertise, management, technology and equipment essential to the alleged abuses came from the US. This has now, so it would seem, been further backed up by detailed facts however even these facts did not graduate so to speak the US companies’ involvement from management and effective control to ‘aiding and abetting’ as Scheindlin USDJ had instructed counsel to show.

Similarish issues are at stake in trying to subject activities taking place outside the EU, to EU law by virtue of companies’ EU headquarters.

Geert.

Al Shimari v. CACI: An ATS case found to touch and concern the US with sufficient force.

Regular or indeed occasional readers of the blog will have been following developments in US case-law since SCOTUS issued its ruling in Kiobel. In Al Shimari v. Caci, the fourth circuit Court of Appeal held in early July that plaintiffs’ claims “touch and concern” the territory of the United States with sufficient force to displace the presumption against extraterritorial application of the Alien Tort Statute: that is the test which SCOTUS set in Kiobel.

Due to a shortage of trained military interrogators, the US hired civilian contractors to interrogate detainees at Abu Ghraib, Iraq – context will be known to readers. During the time period relevant to the civil action, those private interrogators were provided exclusively by CACI Premier Technology, Inc. (CACI), a corporation domiciled in the US. Plaintiffs in the case are foreign nationals who allege that they were tortured and otherwise mistreated by American civilian and military personnel while detained at Abu Ghraib. Plaintiffs allege that CACI employees “instigated, directed, participated in, encouraged, and aided and abetted conduct towards detainees that clearly violated the Geneva Conventions, the Army Field Manual, and the laws of the United States.”

The Court of Appeal noted among many things that SCOTUS in Kiobel broadly stated that the “claims,” rather than the alleged tortious conduct, must touch and concern United States territory with sufficient force, suggesting in the view of the CA that courts must consider all the facts that give rise to ATS claims, including the parties’ identities and their relationship to the causes of action. It found that the claims do concern US territory, pointing to the fact that:

the plaintiffs’ claims allege acts of torture committed by United States citizens who were employed by an American corporation, CACI, which has corporate headquarters located in Fairfax County, Virginia. The alleged torture occurred at a military facility operated by United States government personnel.

In addition, the employees who allegedly participated in the acts of torture were hired by CACI in the United States to fulfill the terms of a contract that CACI executed with the United States Department of the Interior. The contract between CACI and the Department of the Interior was issued by a government office in Arizona, and CACI was authorized to collect payments by mailing invoices to government accounting offices in Colorado. Under the terms of the contract, CACI interrogators were required to obtain security clearances from the UnitedStates Department of Defense. Finally, the allegations are not confined to the assertion that CACI’s employees participated directly in acts of torture committed at the Abu Ghraib prison. The plaintiffs also allege that CACI’s managers located in the United States were aware of reports of misconduct abroad, attempted to “cover up” the misconduct, and “implicitly, if not expressly, encouraged” it.

(The case nb is not home and dry: whether the claims present non-justiciable political questions still needs to be determined by the district court).

Many out there must be writing PhDs on related issues: a moving target indeed!

Geert.

A death prolonged or hope renewed? The ‘Apartheid’ twist to Kiobel and the ATS.

Update 19 June 2017. SCOTUS held today in BMS and rejected jurisdiction.

Update 8 May 2017. Transcipt of pleadings issued in BMS and background here.

Update 12 January 2017 Bristol-Myers, if certiorari will be granted, will further define the limits to the Daimler case-law. Notice how Bristol-Myers, in their certiorari submission, emphasise predictability for the defendant: a sentiment often found in EU private international law. Update 19 January 2017. Certiorari granted.

Update 6 January 2017 a new case has just been launched in New York, against Germany, re its colonial past in Namibia, which one imagines will test both sovereign immunity and ATS.

(Update 3 September 2014: case dismissed end of August). Previous Update 25 July 2014: Docket still shows active case but no further development).

(Update on linked development: in April 2015, SCOTUS denied certiorari in Chiquita, in whuich the CA had applied Kiobel restrictively).

In Kiobel, the USSC /SCOTUS held on the basis of extraterritoriality: under what circumstances may US courts recognize a cause of action under the Alien Torts Statute, for violations of the law of nations, occurring within the territory of a sovereign other than the United States? In focusing on this question (and replying in the negative), the SC did not entertain the question which actually led to certiorari, namely whether the law of nations recognises corporate liability.

Soon after the same USSC held in Daimler that general jurisdiction other than in the State of incorporation applies only (in the case of foreign companies) when a foreign company’s “continuous corporate operations within a state [are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.”

In the ‘Apartheid litigation’ [Lungisile Ntsebeza et al v Ford General motors and IBM], the Southern District of New York picked up the issue where SCOTUS had left it: can corporations be held liable under the Alien Tort Statute (“ATS”) for violations of “the law of nations”‘? Scheindlin USDJ held they can on 17 April last [Xander Meise Bay has a good overview of the successive litigation here]. She firstly held that it is federal common law that ought to decide whether this is so – not international law itself (ATS being a federal US Statute). Next she argued that the fact in particular (withheld by Jacobs J in Kiobel) that few corporations were ever held to account in a court of law for violations of public international law was not instrumental in finding against such liability.

Counsel have now been instructed to brief on the ‘touch and concern’ test put forward by the Supreme Court in Kiobel, with the warning that they must show in particular that the companies concerned acted ‘not only with the knowledge but with the purpose to aid and abet the South African regime’s tortious conduct as alleged in these complaints’.  A strict timetable for arguments has been laid down whence the wait for further development should not be too long. (Update 25 July 2014: Docket still shows active case but no further development; Update 3 September 2014: case dismissed end of August).

Geert.