2005 International Law Update, Volume 11, Number 1 (January)

2005 International Law Update, Volume 11, Number 1 (January)

Legal Analyses published by Mike Meier, Attorney at Law. Copyright 2017 Mike Meier. www.internationallawinfo.com. 

ANTI-TERRORISM MEASURES

House of Lords unanimously rules that statute allowing suspected terrorists who are foreign nationals to be detained indefinitely without trial is incompatible with European Convention On Human Rights as implemented in U.K. by Human Rights Act of 1998

In December 2001, the British Home Secretary certified and detained eight of the present appellants now before the House of Lords under Sections 21 and 23 of the Anti-terrorism, Crime and Security Act of 2001. The same thing happened to No. 9 a few months later. Appellants 1 and 2 invoked their rights to leave the U. K. Another ended up in the Broadmoor Hospital for the mentally ill. Another got out on strictly conditioned bail and the Secretary let a third go unconditionally.

All nine attack a decision of the Court of Appeal in October 2002. It granted the Home Secretary’s appeal against the ruling of the Special Immigration Appeals Commission (SIAC) of July 2002 and dismissed the appellants’ cross-appeals.

All appellants are foreign (non‑UK) nationals. None has been charged with a crime. In no case is a criminal trial contemplated. All challenge the lawfulness of their detention. More specifically, they all contend that such detention was incompatible with duties binding on the United Kingdom under the European Convention on Human Rights and Fundamental Freedoms, given domestic U. K. effect by the Human Rights Act of 1998.

They contend that the United Kingdom was not legally entitled to derogate from those obligations. Assuming arguendo that it was, its derogation nonetheless fails to square with the Convention and so could not justify the detention. Moreover, they urge that the statutory provisions under which they are being detained fail to comport with the Convention.

The only duty of the House of Lords in its purely judicial capacity, is to determine the legal validity of the appellants’ challenges. The mounting of the attacks against the United States on September 11, 2001, inevitably raised deep concerns in other western countries about their own security against terrorism. This was particularly so for nations such as the United Kingdom, who openly stood behind the United States and its military response to Al‑Qaeda, the responsible organization. Usama bin Laden, its moving spirit, aimed threats specifically against the United Kingdom and its people.

The British Government reacted to the events of 11 September in two relevant ways. First, it introduced (and Parliament, subject to amendment, very swiftly enacted) what became Part 4 of the Anti‑terrorism, Crime and Security Act of 2001. Secondly, it made an order under the Human Rights Act of 1998 (the Derogation Order).

First, ¶ 2(2) of Schedule 3 in the Immigration Act of 1971 authorized the Secretary of State to detain a non‑British national pending the making of a deportation order against him or her. Paragraph 2(3) of the same schedule empowered the Secretary of State to detain a person against whom a deportation order had been made “pending his removal or departure from the United Kingdom”. [Cites]. The English courts later ruled that such detention was allowable only for such time as was reasonably necessary for the process of deportation to be carried out.

Article 5(1) of the Convention guarantees the fundamental human right of personal freedom. In Article 1, contracting states undertake to secure the Convention rights and freedoms to “everyone within their jurisdiction”. Since the right of personal freedom cannot be absolute, Article 5(1) allows for certain exceptions. One exception is the key to these appeals: “(1) Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law: ...(f) the lawful arrest or detention of . . . a person against whom action is being taken with a view to deportation ...”

In Chahal v United Kingdom 23 E.H.R.R. 413 (1996) before the European Court of Human Rights, the U.K. had detained petitioner for several years. He had objected to his deportation back to India on the grounds that he faced a real risk of death, or of torture in custody contrary to Article 3 of the European Convention. It provides in absolute terms that: “No one shall be subjected to torture or to inhuman or degrading treatment or punishment.”. The question then arises whether invoking a deportation procedure can apply if it will end up submitting the deportee to the violation of his absolute Article 3 rights. If the foreign citizen is, in effect, non-deportable, can the state justify his indefinite detention as part of a deportation process?

“The prohibition provided by Article 3 against ill‑treatment is equally absolute in expulsion cases. Thus, whenever substantial grounds have been shown for believing that an individual would face a real risk of being subjected to treatment contrary to Article 3 if removed to another state, the responsibility of the contracting state to safeguard him or her against such treatment is engaged in the event of expulsion. In these circumstances, the activities of the individual in question, however undesirable or dangerous, cannot be a material consideration.” [¶ 80]

The European Convention grants to member states a limited right to derogate from some articles of the Convention (including art 5, although not art 3). The relevant provision from Article 15, provides: “Derogation in time of emergency: 1. In time of war or other public emergency threatening the life of the nation any High Contracting Party may take measures derogating from its obligations under this Convention to the extent strictly required by the exigencies of the situation, provided that such measures are not inconsistent with its other obligations under international law.”

A Member State availing itself of the right of derogation has to notify the Secretary General of the Council of Europe of the measures it has taken and the reasons for them. It must also tell the Secretary when the measures have ceased to operate and thus when the provisions of the Convention are again being fully obeyed. The Human Rights Act of 1998 did not expressly incorporate Article 15. Section 14 of the Act, however, allows prospective derogations by the United Kingdom in an order made by the Secretary of State. It was in exercise of his power under that section that the Home Secretary, on November 11, 2001, made the Derogation Order.

The Lords of Appeal quash the derogation order in respect of the Human Rights Act 1998 (Designated Derogation) Order 2001. There will also be a declaration under Section 4 of the 1998 Act that Section 23 of the Anti‑terrorism, Crime and Security Act 2001 is incompatible with Articles 5 and 14 of the European Convention on Human Rights and Fundamental Freedoms (ETS No. 5, November 4, 1950).

Of the lengthy Anti-terrorism Act of 2001, the parties zeroed in on Part 4 (“Immigration and Asylum”). Only Part 4 confers the power to detain foreigners indefinitely on reasonable suspicion without charge or trial and only Part 4 is the subject of the U. K. government’s derogation.

Section 24 of the Act authorizes SIAC to grant bail. Under Section 25, a certified suspected international terrorist may appeal to SIAC against his or her certification. Other sections require SIAC to periodically review all certifications and provide for the final expiration of those sections, unless renewed, on November 10, 2006.

The appellants argued before the House that there neither was, nor is, a “public emergency threatening the life of the nation” within the meaning of Article 15(1). Thus, they contended, the government has failed to pass the threshold test for reliance on Article 15.

“It falls in the first place to each contracting state, with its responsibility for ‘the life of [its] nation’, to determine whether that life is threatened by a ‘public emergency’ and, if so, how far it is necessary to go in attempting to overcome the emergency. By reason of their direct and continuous contact with the pressing needs of the moment, the national authorities are in principle in a better position than the international judge to decide both on the presence of such an emergency and on the nature and scope of derogations necessary to avert it. In this matter, Article 15(1) leaves those authorities a wide margin of appreciation.” [¶ 207]

“Nevertheless, the States do not enjoy an unlimited power in this respect. The court, which, with the Commission, is responsible for ensuring the observance of the states’ engagements (Art. 19), is empowered to rule on whether the states have gone beyond the ‘extent strictly required by the exigencies’ of the crisis. The domestic margin of appreciation is thus accompanied by a European supervision.”

The appellants did not seek to downplay the calamitous nature of what had taken place on September 11, 2001 nor the threat posed to western democracies by international terrorism. But they argued that, for three main reasons, there is no public emergency threatening “the life of” the British nation. First, if the emergency was not (as in all the decided cases) actual, it must be shown to be imminent, which the government could not show here. Secondly, the emergency must be of a temporary nature, which again could not be evidenced here. Finally, none of the 45 other Member States, many of them victims of terrorism, has derogated from the European Convention. This strongly suggests that no public emergency exists calling for derogation by the U.K.

The House then addresses the appellants’ present detention “We do not have power in these proceedings to order that the detainees be released. This is not a challenge to the individual decisions to detain them. That may come before us in future. It is in that context that the issue of the admissibility of evidence which may have been obtained by the use of torture abroad could arise. But that issue is not before us at present. Before us is a challenge to the validity of the law under which the detainees are detained. That law is contained in an Act of Parliament, the Anti‑terrorism, Crime and Security Act of 2001.”

“The Human Rights Act 1998 is careful to preserve the sovereignty of Parliament. The courts cannot strike down the laws which the Queen in Parliament has passed. However, if the court is satisfied that a provision in an Act of Parliament is incompatible with a Convention right, it may make a declaration of that incompatibility (under Section 4 of the 1998 Act). This does not invalidate the provision or anything done under it. But Government and Parliament then have to decide what action to take to remedy the matter.” [¶ 218]

The Convention right in question here is the right under Article 5(1). It provides: “Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases . . .” There are then listed six possible reasons for depriving a person of his liberty, none of which applies here. Appellants are not detained under Article 5(1)(f) ‘with a view to deportation or extradition’ because they cannot be deported and no other country has asked for their extradition.”

“They are being detained on suspicion of being international terrorists, a reason which does not feature in Article 5. It does not feature because neither the common law, from which so much of the European Convention is derived, nor international human rights law allows indefinite detention at the behest of the executive, however well‑intentioned. It is not for the executive to decide who should be locked up for any length of time, let alone indefinitely. Only the courts can do that and, except as a preliminary step before trial, only after the grounds for detaining someone have been proved. Executive detention is the antithesis of the right to liberty and security of person.” [¶¶ 219-20]

“Yet that is what the 2001 Act allows. The Home Secretary may issue a certificate (under Section 21) if he reasonably (a) believes that a person’s presence here is a risk to national security, and (b) suspects that he is a terrorist. A terrorist is someone who takes part in acts of international terrorism, belongs to an international terrorist group, or merely supports or assists such a group. These are all likely to be criminal offences under the Terrorism Act 2000 or other legislation.”

“But a person so certified can be detained indefinitely (under Section 23) without being charged with, or tried for, any criminal offence (indeed one of the detainees has been tried and acquitted of such an offence). There are safeguards, as the Attorney General has rightly pointed out, greater than under any earlier internment powers. Belmarsh is not the British Guantanamo Bay.”

“Their cases must be reviewed by the [SIAC]. SIAC can see all the material which was available to the Home Secretary. But much of this is ‘closed’ so that the detainee and his lawyers cannot see it. Instead there are ‘special advocates’ who can see it, cross‑examine witnesses, and make representation to SIAC about it, and may even persuade SIAC that some of the material should be disclosed to the detainee. But they cannot discuss it with, or take instructions from, the detainee, so they do not know whether he might have an answer to it.” [¶ 221]

“The detainee does not know a good deal of the case against him. He is not even interviewed by the authorities so that he can attempt to give some account of himself, (although that might be rather limited if they cannot tell him what they have against him). SIAC does know the case against him, but all it can do is decide whether the Home Secretary’s belief and suspicion were in the circumstances reasonable. SIAC does not decide whether the detainee actually is an international terrorist as defined in the Act, merely whether the Home Secretary reasonably suspects that he is. Suspicion is an even lower hurdle than belief: belief involves thinking that something is true; suspicion involves thinking that something may be true.”

“It is not surprising that, of the 16 who have been detained under Section 23 so far, only one has had his certificate cancelled by SIAC. Another has had his certificate discharged by the Home Secretary. Two others have left for other countries. For the rest there is no end in sight and no clear idea of what they might be able to do to secure their release. One has been transferred to Broadmoor (we have not been told the legal basis for this) and another has been granted bail by SIAC on very strict conditions of house arrest because of his mental condition. If we have any imagination at all, this should come as little surprise. We have always taken it for granted in this country that we cannot be locked up indefinitely without trial or explanation.” [¶ 221]

“[Convention] Article 5 applies to ‘everyone’. States who are parties to the European Convention are required by Article 1 to secure the rights and freedoms defined in the Convention to ‘everyone within their jurisdiction’. This includes everyone physically present within their territory. So it was necessary for the United Kingdom to depart from its normal obligations under the Convention in order to enact this legislation. Departure is permitted under Article 15 [quoted above].” [¶ 222]

“The rights defined in the Convention have become rights in United Kingdom law by virtue of the Human Rights Act; but Section 1(2) provides that the rights defined in the Convention articles shall have effect subject to any ‘designated derogation’. This means a derogation designated in an order made by the Secretary of State under Section 14, in this case the Human Rights Act 1998 (Designated Derogation) Order 2001. Such an order would not be within his powers if it provided for a derogation which was not allowed by the Convention. Section 30(2) and (5) of the 2001 Act allow the detainees to challenge this derogation from their Article 5(1) rights in proceedings before SIAC and in an appeal from SIAC’s decision.”

“Thus it is that we have power to consider the validity of the Derogation Order made by the Secretary of State and to quash it if it is invalid. If the Derogation Order is invalid, it follows that detention powers under the 2001 Act are incompatible with the Convention rights as defined in the Human Rights Act and that we have power to declare it so. It will then be for Parliament to decide what to do about it.” [¶ 223]

“The courts’ power to rule on the validity of the derogation is another of the safeguards enacted by Parliament in this carefully constructed package. It would be meaningless if we could only rubber‑stamp what the Home Secretary and Parliament have done. But any sensible court, like any sensible person, recognises the limits of its expertise. Assessing the strength of a general threat to the life of the nation is, or should be, within the expertise of the Government and its advisers. They may, as recent events have shown, not always get it right. But courts too do not always get things right. It would be very surprising if the courts were better able to make that sort of judgment than the Government.”

“Protecting the life of the nation is one of the first tasks of a Government in a world of nation states. That does not mean that the courts could never intervene. Unwarranted declarations of emergency are a familiar tool of tyranny. If a Government were to declare a public emergency where patently there was no such thing, it would be the duty of the court to say so. But we are here considering the immediate aftermath of the unforgettable events of 11 September 2001. The attacks launched on the United States on that date were clearly intended to threaten the life of that nation. SIAC were satisfied that the open and closed material before them justified the conclusion that there was also a public emergency threatening the life of this nation.” [¶ 224]

“But what is then done to meet the emergency must be no more than ‘is strictly required by the exigencies of the situation’. The Government wished to solve a problem which had three components: (1) it suspected certain people living here of being international terrorists ‑ in the very broad definition given to that term by the Act; but (2) either it could not, or it did not, wish to prove this beyond reasonable doubt by evidence admissible in a court of law; and (3) it could not solve the problem by deporting them, either for practical or for legal reasons.” [¶ 225]

The House then addresses the question of discrimination. “There is every reason to think that there are British nationals living here who are international terrorists within the meaning 6-of the Act; who cannot be shown to be such in a court of law; and who cannot be deported to another country because they have every right to be here.”

“Yet the Government does not think that it is necessary to lock them up. Indeed, it has publicly stated that locking up nationals is a Draconian step which could not at present be justified. But it has provided us with no real explanation of why it is necessary to lock up one group of people sharing exactly the same characteristics as another group which it does not think necessary to lock up.”[¶ 226]

“The Attorney General’s arguments were mainly directed to the entirely different question of whether it is justifiable in international law to treat foreigners differently from nationals. The unsurprising answer is that some differences in treatment are indeed allowed. Foreigners do not have to be given the same rights to participate in the politics and government of the country as have citizens (see art 16 of the Convention). Nor do they have to be given the same rights to come or to stay here; if they are here, they may be refused entry or deported (and detained for that purpose under Article 5(1)(f)). But while they are here they have the same human rights as everyone else. This includes not being forcibly removed to a place where they are liable to suffer torture or other severe ill‑treatment contrary to Art 3 of the Convention. It also includes not being locked up except in the circumstances allowed under Article 5.” [¶ 227]

“The Attorney General did argue that it would have been discriminatory to lock up the nationals as well as the foreigners, because the foreigners are free to leave this country if they can and want to do so, but nationals have no other country which has an obligation to receive them. It is correct that we have no power to force our nationals to go, unless some other country wishes to extradite them. But if it is necessary to lock anyone up in a ‘prison with three walls’, the reality is that it will depend upon the personal circumstances of each individual whether he has in fact somewhere else to go.”

“Some nationals may, for example, have dual nationality or friends in foreign countries which are happy to receive them. But the very fact that it is a prison with only three walls also casts doubt upon whether it is ‘strictly required by the exigencies of the situation’. What sense does it make to consider a person such a threat to the life of the nation that he must be locked up without trial, but allow him to leave, as has happened, for France where he was released almost immediately?” [¶ 228]

“The conclusion has to be that it is not necessary to lock up the nationals. Other ways must have been found to contain the threat which they present. And if it is not necessary to lock up the nationals it cannot be necessary to lock up the foreigners. It is not strictly required by the exigencies of the situation.”

“It is also inconsistent with our other obligations under international law from which there has been no derogation, principally Article 14 of the European Convention. This states: ‘The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.’” [¶¶ 229-30]

Article 14 would make it unlawful to single out foreign nationals for less favourable treatment in respect of their Article 5 rights whether or not the derogation from those rights was “strictly required by the exigencies of the situation”. It is wrong to single them out for detention without trial if detention without trial is not strictly required to meet the exigencies of the situation. It is also wrong to single them out for detention without trial if detention without trial is strictly required, if there are other people who are in the same situation and there is no objective justification for the difference in treatment. Like cases must be treated alike.” [¶ 232]

“Are foreigners and nationals alike for this purpose? The Attorney General argued that they are not. The foreigners have no right to be here and we would expel them if we could. We only have to allow them to stay to protect them from an even worse invasion of their human rights. Hence, he argued, the true comparison is not with suspected international terrorists who are British nationals but with foreign suspected international terrorists who can be deported.”

“This cannot be right. The foreigners who can be deported are not like the foreigners who cannot. These foreigners are only being detained because they cannot be deported. They are just like a British national who cannot be deported. The relevant circumstances making the two cases alike for this purpose are the same three which constitute the problem: a suspected international terrorist, who for a variety of reasons cannot be successfully prosecuted, and who for a variety of reasons cannot be deported or expelled.” [¶ 233]

“Even then, the difference in treatment might have an objective justification. But, to do so, it must serve a legitimate aim and be proportionate to that aim. Once again, the fact that it is sometimes permissible to treat foreigners differently does not mean that every difference in treatment serves a legitimate aim. If the situation really is so serious, and the threat so severe, that people may be detained indefinitely without trial, what possible legitimate aim could be served by only having power to lock up some of the people who present that threat? This is even more so, of course, if the necessity to lock people up in this way has not been shown.” [¶ 234]

Citation: A and others v. Secretary of State for the Home Department, [2004] U.K.H.L. 56 (Transcript) (House of Lords, December 16, 2004).

ANTI-TERRORISM MEASURES

Ninth Circuit upholds constitutionality of federal ban on financially supporting organization Secretary of State has designated “terroristic”

U.S. law prohibits the giving of financial support to officially designated terrorist organizations. See 28 U.S.C. Section 2339B(a)(1). According to a federal indictment, Roya Rahmani and others conspired to provide material support to the Mujahedin-e Khalq (MEK), an organization which the Secretary of State has certified as terroristic under 8 U.S.C. Section 1189. Iranian Marxists had founded MEK in the 1960s as a group seeking to overthrow the government. In 1979, it took part in taking American embassy personnel hostage in Iran. Later on, MEK members fled Iran. They ended up settling in Iraq near the Iranian border, whence they carried out terrorist attacks.

Within the U. S., the defendants asked for charitable contributions at the Los Angeles International Airport for the so-called “Committee for Human Rights.” They then forwarded the collected money to the MEK. MEK provided other funding as well, totaling several hundred thousand dollars. The defendants knew that the U. S had designated MEK as a “terrorist” outfit, having attended a conference call with an MEK leader who had revealed that fact.

The district court dismissed the indictment because it considered the terrorist designation statute, 8 U.S.C. Section 1189, unconstitutional. The district court reasoned that the restriction of judicial review only to the D.C. Circuit invalidated the statute. On the government’s appeal, the U.S. Court of Appeals for the Ninth Circuit reverses.

Section 1189 sets forth a scheme for designating foreign terrorist organizations. The Secretary of State has to make specific findings that the organization takes part in terrorist activity and thereby threatens U.S. security. The designated organization may seek judicial review of the Secretary’s determination in the U.S. Court of Appeals for the District of Columbia Circuit.

The present Court reject appellants’ attack on Section 1189. “Many administrative determinations are reviewable only by petition to the correct circuit court, bypassing the district court, and that procedure has generally been accepted. The congressional restriction does not interfere with the opportunity for judicial review, as the MEK’s extensive litigation history shows. And this scheme avoids the awkwardness of criminalizing material support for a designated organization in some circuits but not others, as varying decisions in the different regional circuits might.” [Slip op. 6-7].

The next question is whether the U. S. may criminally prosecute a defendant for donating to such an organization. The defendants argued that Section 2339B that bars material support to designated foreign terrorist organizations denies plaintiffs’ constitutional rights because it takes away their chances to collaterally attack the designation. Section 1189(a)8) provides that “... a defendant in a criminal action ... shall not be permitted to raise any question concerning the validity of ... such designation ... as a defense or an objection at any trial or hearing.”

“The defendants are right that Section 1189(a)(8) prevents them from contending, in defense of the charges against them under 18 U.S.C. Section 2339B, that the designated terrorist organization is not really terrorist at all. No doubt Congress was well aware that some might be of the view that ‘one man’s terrorist is another man’s freedom fighter.’ ... Under Section 2339B, if defendants provide material support for an organization that has been designated a terrorist organization under Section 1189, they commit the crime, and it does not matter whether the designation is correct or not.”

“The question then is whether due process prohibits a prosecution under Section 2339B when the predicate designation was obtained in an unconstitutional manner or is otherwise erroneous. ...”

“... [H]ere, the defendants’ rights were not directly violated in the earlier designation proceeding. The predicate designation was against the MEK, not the defendants. Section 1189 provides for the organizations to seek review of the predicate designation, and that review was had in this case. Therefore, due process does not require another review of the predicate by the court adjudicating the instant Section 2339B criminal proceeding.” [Slip op. 10-14]

The defendants claim, furthermore, a First Amendment right to support an organization that the Department of State has mistakenly designated as terrorist. The Court is not convinced.

Section 2339B does not impermissibly restrict the defendants’ First Amendment right of association. “Conceivably the MEK developed its practices at a time when the United States supported the previous regime in Iran, and maintained its position while harbored by the Saddam Hussein Ba’ath regime in Iraq, but will change, or has already changed, so that its interest in overturning the current regime in Iran coincides with the interests of the United States.”

“The sometimes subtle analysis of a foreign organization’s political program to determine whether it is indeed a terrorist threat is peculiarly within the expertise of the State Department and the Executive Branch. ... Leaving the determination to the Executive Branch, coupled with the procedural protections and judicial review afforded by the statute, is both a reasonable and a constitutional way to make a determination of whether a group is a ‘foreign terrorist organization.’ The Constitution does not forbid Congress from requiring individuals, whether they agree with the Executive Branch designation or not, to refrain from furnishing material assistance to designated organizations during the two-year period of designation.” [Slip op. 25-26]

Citation: United States v. Afshari, No. 02-50355 (9th Cir. December 20, 2004).

CHILD ABDUCTION

In case of first impression, Second Circuit adopts new standard for determining “habitual residence” of child under Hague Convention on Child Abduction

Yossi Gitter (“Yossi”) is an Israeli citizen who moved to the U.S. in 1995. Here he met and, in 1999, married Miriam. Their son, Eden, was born the following year. Miriam is a citizen of both Israel and the U.S. but has spent most of her life in the U.S. Later, Miriam reluctantly agreed to move the family to Israel. In 2002, however, she took Eden to New York and remained in the U.S.

The U.S. has ratified the Hague Convention on the Civil Aspects of International Child Abduction [October 25, 1980, T.I.A.S. No 11670, 1343 U.N.T.S. 89, 51 Fed. Reg. 10,494 (March 26, 1986) (Convention)]. In 2000, the U.S. made the Convention effective as U.S. law by the International Child Abduction Remedies Act (ICARA), 42 U.S.C. Section 11601 (2000). Both Israel and the U.S. are parties to the Convention.

In 2003, Yossi sought an order pursuant to the Convention and the Act from a New York federal court compelling Miriam to return their son to Israel. The court, however, ruled that Eden had never become “habitually resident” in Israel because Miriam had only conditionally resided there. Yossi appealed.

Fashioning a new approach in determining the habitual residence of a child under the Convention, the U.S. Court of Appeals for the Second Circuit remands to the district court for reconsideration of the matter in light of the new standard.

The Convention seeks to protect children from wrongful removal or retention. To invoke its protections, the complainant has to show that respondent has “wrongfully removed” a child from a Member State where he/she is “habitually resident” to another Member State.

Unfortunately, the Convention does not define the phrase “habitually resident.” Other Circuits having visited the issue, the Court cites Mozes v. Mozes, 239 F.3d 1067 (9th Cir. 2001). There, the Ninth Circuit recognizes the importance of “intentions” in determining a child’s habitual residence. Further, a court must consider to what extent the child may have become accustomed to its new surroundings. The Court then describes the proper standard as follows:

“ ... [W]e conclude that in determining a child’s habitual residence, a court should apply the following standard: First, the court should inquire into the shared intent of those entitled to fix the child’s residence (usually the parents) at the latest time that their intent was shared. In making this determination the court should look, as always in determining intent, at actions as well as declarations. Normally the shared intent of the parents should control the habitual residence of the child.”

“Second, the court should inquire whether the evidence unequivocally points to the conclusion that the child has acclimatized to the new location and thus has acquired a new habitual residence, notwithstanding any conflict with the parents’ latest shared intent.” [Slip op. 21]

Applying this standard to this case, the Court notes that the parents disagreed as to whether Eden should become habitually resident in Israel. The district court concluded that there was no settled mutual intent on that issue. Yossi acted as if Israel was their one and only residence, while Miriam considered the stay “conditional.” The district court, however, did not make any findings as to what extent Eden may have adapted to Israel and thus acquired his habitual residence there. The Court remands for the district court to make that determination and possibly to correct the judgment accordingly.

Citation: Gitter v. Gitter, No. 03-9299 (2d Cir. January 5, 2005).

FORUM NON CONVENIENS

Disagreeing with Second and D.C. Circuits, Fifth Circuit holds that, before ruling on forum non conveniens motions, court must first decide whether it has subject matter jurisdiction over the controversy

In June 2001, a vehicle accident on a Mexican national highway injured several Mexican citizens (plaintiffs). The crash allegedly involved a defective General Motors (GM) vehicle and a Cooper Tire & Rubber Company (Cooper) tire. The Plaintiffs sued, inter alia, GM, Cooper, and the driver of the vehicle.

The district court granted defendants’ motion to dismiss the plaintiffs’ claim on forum non conveniens grounds without first deciding whether it had subject matter jurisdiction over the case. Plaintiffs duly took an appeal. The U.S. Court of Appeals for the Fifth Circuit, in a per curiam opinion, vacates and remands.

The Court notes, first, that the district courts are courts of limited jurisdiction. Therefore, they have to be alert to the alleged bases of its subject matter jurisdiction before proceeding with a given case. Here, the district court should first have considered subject matter jurisdiction before addressing the forum non conveniens motion.

The present Court concedes that the Second and District of Columbia Circuits have reached a contrary result. “... [B]oth Circuits label forum non conveniens as a non-merits issue and so hold valid the process of using forum non conveniens as a grounds for dismissal where subject matter jurisdiction has not first been decided. For the following reasons, we disagree with this analysis. [...].”

“‘The forum non conveniens inquiry consists of several steps.’ First, the defendant invoking the doctrine must establish that there is an alternate forum both available and adequate. An available forum is one where the case and all the parties can come within its jurisdiction ... [emphasis in original]’”

“‘Having established an available and adequate forum, the defendant must then show that certain private factors support dismissal. These private factors are: (1) the relative ease of access to sources of proof; (2) the availability of compulsory process for attendance of unwilling, and the costs of obtaining attendance of willing, witnesses; (3) [the] probability of an opportunity to view the premises, if view would be appropriate to the action; and (4) other factors affecting the ease, speed, and expense of trial or the enforceability of a judgment if obtained.’”

“‘If these private interest factors do not indicate that another forum is better suited for trial of the case, the court should then examine certain public interest factors ... The public interest factors are: The administrative difficulties flowing from court congestion, [and] the ‘local interest in having localized controversies decided at home.’”

“... In order to apply this analysis, the court must look at the particular facts of the case, and to this extent, it must reach the merits. For example, the court, in evaluating the ‘private factors’ must review the evidence in order to determine whether or not it will be accessible in the respective forums and consider the fairness of litigating in the respective forums and evaluate the difficulty of litigating the case in a forum which has few contacts with the litigants or with the accident. ... As a result, therefore, we are unable to characterize forum non conveniens as a ‘non-merits’ issue akin to personal jurisdiction.” [Slip op. 5-9]

Citation: Dominguez-Cota v. Cooper Tire & Rubber Co., No. 03-60802 (5th Cir. January 7, 2005).

SOVEREIGN IMMUNITY

Where creditor company of foreign state attempted to attach its funds held by third party in United States, Fifth Circuit denies attachment and garnishment because state had not used funds for “commercial activity”

The Republic of Congo (ROC) allegedly owes Walker International Holdings, Ltd. (WIH) a substantial sum of money. WIH had bought the debt from an Italian company, Sadelmi Cogepi SpA (Sadelmi), which had finished a construction project in the ROC. Thereafter, under the terms of the Sadelmi-ROC contract, WIH had to arbitrate the matter before the International Chamber of Commerce (ICC) in Paris, where the panel awarded it $26 million. Unable to collect, WIH filed this garnishment action and temporary restraining order (TRO) against Murphy Exploration & Production International (MEPI) which owed the ROC money.

The district court dismissed the action after the magistrate judge found that MEPI had not used the garnished funds for a “commercial activity” in the U.S. Disagreeing, WIH appealed. The U.S. Court of Appeals for the Fifth Circuit agrees with the district court and affirms.

In its analysis, the Court first turns to the question of whether the ROC had waived its sovereign immunity “either explicitly or by implication” according to the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. Section 1610(a)(1). An implied waiver of immunity under the FSIA for certain state property requires that the property (a) be in the U.S. and (b) be used for commercial activity.

Here, the ROC did in fact waive its sovereign immunity by signing contracts with MEPI that provided for arbitration proceedings where the ROC would not raise an immunity defense. The ROC agreed to abide by the ICC rules (in particular Rule 28(6)), which preclude the ROC from asserting a sovereign immunity defense. Thus, the ROC had expressly waived its sovereign immunity.

The Court then turns to the question of the property’s presence in the U.S. WIH argued that it is in fact “present” in the U.S. for two reasons. First, pledges of petroleum in the ROC to induce payments by an American company constituted commercial activity in the United States. Secondly, the ROC contracted for legal services in the U.S. to defend against this garnishment action. Here, similar to a prior case involving the ROC, WIH did not try to attach the petroleum found in the ROC, but a related surety bond obtained in the U.S. Therefore, for FSIA purposes, the situs of the relevant property is in the U.S.

Next, the FSIA requires that the defendant use the U.S. property for commercial reasons. The FSIA [rather unhelpfully] defines activity as “commercial” if it is “either a regular course of commercial conduct or a particular commercial transaction or act.” 28 U.S.C. Section 1603(a). Here, the ROC pledged some of its petroleum revenue to pay for various administrative and transactional expenses related to the negotiation of the oil contracts.

WIH also contended that the ROC’s payment of legal fees in the U. S. constituted commercial activity. The Court disagrees. The fact that property was generated through commercial activity (here: oil exploration in the ROC) is irrelevant. Nor did negotiations over property interests make the property “used for commercial activity” under the FSIA.

Citation: Walker Int’l Holdings, Ltd. v. The Republic of Congo, No. 04-20301 (5th Cir. December 22, 2004).

SOVEREIGN IMMUNITY

Eleventh Circuit affirms dismissal of action against Honduras in contract dispute over weapons sales because of absence of direct effect in U.S.

Samco Global Arms, Inc. (SGA) is a Florida-based arms dealer. In 1985, Longlac Enterprises Corporation (LEC), a Panamanian company, entered into a contract with Honduras to ship weapons to Honduras free of taxes and other fees. The Honduran Armed Forces were to store the weapons at military facilities. In return, Honduras would have a right of first refusal to buy weapons from that inventory. This arrangement continued until 1994 when the Honduran government changed. Thereafter, LEC ran into bars to accessing its weapons. Eventually, LEC sold all of its rights in the weapons to SGA.

SGA sued (1) Carlos Arita (in his official capacity as the “Procurador General” of Honduras), (2) the “Procuraduria General” itself, as well as the State of Honduras, for breach of contract. [Note: The “Procuraduria General” is the agency in charge of legally representing Honduras. Its head, the “Procurador General,” resembles the U.S. Attorney General.] SGA here argued that Honduras had been carrying on a commercial activity outside the U.S. that had a direct effect in the U.S. For example, Honduras allegedly breached its contract by attaching the weapons during an investigation and by letting their condition go downhill while in storage.

The district court dismissed the case without prejudice because it considered the defendants immune under the Foreign Sovereign Immunities Act (FSIA) (28 U.S.C. Section 1602). Moreover, the Act of State Doctrine barred the action. On plaintiffs’ appeal, the U.S. Court of Appeals for the Eleventh Circuit affirms on FSIA grounds.

Under the FSIA, a foreign state is not immune from the jurisdiction of U.S. courts if the dispute arises out of a commercial activity carried on in the U.S. See Section 1605(a). U.S. courts may also have jurisdiction in such a case even if the commercial actions took place outside the U.S. during the foreign state’s commercial activity but caused a direct effect in the U.S. See Section 1605(a)(2).

The Court agrees that Honduras’ actions in fact did constitute commercial activity. “We readily conclude that the 1985 contract constituted a commercial activity under the FSIA. This Circuit has held that where the activity at issue involves a government’s contract for purchase and sale of goods, the activity is commercial, and not sovereign. ...”

“This contract was essentially for the bailment of goods with a purchase option; it was predominantly ‘commercial in nature,’ and obviously could have been executed by individuals in the private marketplace. The mere fact that the military was involved in the storage and purchase of arms does not alone convert the activity into an exercise of sovereign power. ...” [Slip op. 10-11]

But SGA urged that defendants’ breach had directly caused it various injuries within the U.S. These included (1) the inability to ship the weapons to the U.S., (2) the cost of having the weapons released, (3) lost profits from future sales, and (4) damage to its reputation. The Court rejects these points.

It considers these U.S.-based injuries too oblique and speculative to have a direct effect in the U.S. The contract provides only that Longlac (now Samco) may retrieve the weapons in Honduras. It does not mandate that the weapons be re-exported to the U.S. (or any other location).

“The contract in this case was between a Panamanian citizen and Honduras, was negotiated and executed in Honduras, involved goods manufactured outside the United States, required performance by Honduras only within its territory, and made no reference whatsoever to the United States. The only tie this case has to the United States is the plaintiff, a non-contracting party, who purchased rights to the contract some 15 years after its execution, in a transaction in which the defendants played no part.”

“Given the total absence of any other contacts with the United States aside from the corporate personality of the assignee to the contract, we cannot find any act of the Honduran government that ‘cause[d] a direct effect in the United States.’ 28 U.S.C. Section 1605(a)(2). Thus, we find that the FSIA precludes this suit against Honduras.” [Slip op. 15]

Citation: Samco Global Arms, Inc. v. Arita, Nos. 03-15283 & 03-16297 (11th Cir. January 5, 2005).

TRADEMARKS

In dispute between Mexican and U.S. parties over trademark, Ninth Circuit holds that there is exception from territoriality principle for famous and well-known foreign marks

The Mexican company, Grupo Gigante S.A. de C.V. (Grupo Gigante). operates many “Gigante” grocery stores in Mexico. The company started in 1962, and by 1991 had almost 100 stores, two of which were located just across the border from San Diego. In 1991, Michael Dallo opened his “Gigante Market” grocery store in San Diego, and his brother Chris opened a second one in 1996.

Grupo Gigante then entered the U.S. market in 1999 by opening several stores in the Los Angeles area. Shortly thereafter, the Dallos sent Grupo Gigante a “cease and desist” letter to stop them from using the word “Gigante.” To this Grupo Gigante responded by filing the present trademark action.

The district court noted that based on the “territoriality principle,” the use of a mark abroad does not preserve any trademark rights in the U.S. Here, however, Grupo Gigante’s use of the mark was well known in Southern California at the time when the Dallos began using it. Thus, the district court applied the “famous mark” or “well-known mark” exception to the territoriality principle and held that Grupo Gigante had a valid claim to the “Gigante” name. Nevertheless, in the court’s view, laches barred Grupo Gigante from enjoining the Dallos’ use of the name because it did not diligently enforce its mark. This appeal ensued. The U.S. Court of Appeals for the Ninth Circuit vacates and remands.

The Court first lays out the legal principles evoked by this case. “ ... [T]he facts of this case implicate ... the ‘territoriality principle.’ The territoriality principle, as stated in a treatise, says that ‘priority of trademark rights in the United States depends solely upon priority of use in the United States, not on priority of use anywhere in the world.’ Earlier use in another country usually does not count.”

“Although we have not had occasion to address this principle, it has been described by our sister circuits as ‘basic to trademark law,’ in large part because ‘trademark rights exist in each country solely according to that country’s statutory scheme.’ While Grupo Gigante used the mark for decades before the Dallos used it, Grupo Gigante’s use was in Mexico, not in the United States. Within the San Diego area, on the northern side of the border, the Dallos were the first users of the ‘Gigante’ mark. Thus, according to the territoriality principle, the Dallos’ rights to use the mark would trump Grupo Gigante’s.” [Slip op. 7-8]

The Court, however, points to an exception to this principle when the foreign use of a mark achieves a certain level of fame within the U.S. “There is not circuit-court authority – from this or any other circuit – applying a famous-mark exception to the territoriality principle. At least one circuit judge has, in a dissent, called into question whether there actually is any meaningful famous-mark exception.”

“We hold, however, that there is a famous mark exception to the territoriality principle. While the territoriality principle is a long-standing and important doctrine within trademark law, it cannot be absolute. An absolute territoriality rule without a famous mark exception would promote consumer confusion and fraud. Commerce crosses borders. In this nation of immigrants, so do people. Trademark is, at its core, about protecting against consumer confusion and ‘palming off.’ There can be no justification for using trademark law to fool immigrants into thinking that they are buying from the store they liked back home.” [Slip op. 11-12]

The Court then lays out the following analysis. First, the court has to determine whether the mark satisfies the secondary meaning test. “Secondary meaning” is a mark’s actual ability to trigger in the consumers’ mind a link between a product or service and the source of that product or service. Therefore, a mark has secondary meaning when it primarily identifies the source of the product rather than the product itself.

Second, when a party has not yet used a trademark in the U.S. market, the court must determine, by a preponderance of the evidence, whether a substantial percentage of consumers in the relevant U.S. market is familiar with the foreign mark. The relevant U.S. market is the geographic area where the defendant uses the allegedly infringing mark.

Finally, the Court adds: “In making this determination, the court should consider such factors as the intentional copying of the mark by the defendant, and whether customers of the American firm are likely to think that they are patronizing the same firm that uses the mark in another country. While these factors are not necessarily determinative, they are particularly relevant because they bear heavily on the risks of consumer confusion and fraud, which are the reasons for having a famous-mark exception.” [Slip op. 24-25]

The Court therefore remands for the district court to take these factors into account.

Citation: Grupo Gigante SA de CV v. Dallo & Co., Inc., No. 00-57118 (9th Cir. December 15, 2004).

Mexico will drop its tariff on U. S. apples. As a result of recent trade negotiations, Mexico has consented to get rid of its 46.6% antidumping tariff on Pacific Northwest Red and Golden Delicious apples. The old tariff went into effect in August of 2002 and will come to an end on February 28, 2005. Yakima’s Northwest Fruit Exporters (NFE) is a nonprofit organization that runs apple and cherry exports for over 80 packers and shippers in Washington, Oregon and Idaho. NFE negotiated the duty-free adjustments in the two kinds of apples mentioned above. Washington state alone exported $607 million in products to Mexico in 2003, up 40 percent over 2002. About 25% of this consisted of food and other agricultural products. Citation: Associated Press (online), Spokane, Washington., Tuesday, January 4, 2005 (byline of John K. Wiley, AP writer); Tri-City Herald, January 4, 2005.

Turkey has simplified its currency. As of January 1, 2005, Turkey has made a major adjustment in its currency by getting rid of the last six zeros on its currency notes. A bank note for 1 million lira has thus become a one-lira note now worth about 74 cents in U. S. money. In practice, the 20,000,000 Lira visit to the movies has turned into 20 new Turkish liras. Annual inflation recently was running about 140% and one response was to add zeros. During 2004, Turkish inflation had gone down to about 12% but the government has set its target inflation rate at 8% for 2005. One Turkish street merchant expressed satisfaction with the change by noting that it will be a good thing to have local money closer to European and U. S. usage. The government apparently has not figured out how to dispose of the 1,600 tons or so of old liras. Many nations have buried or burned their obsolete bank notes. Another option might be making use of the old notes in road-paving. Citation: The New York Times Company (online), Istanbul, December 29, 2004 (byline of Susan Sachs); Los Angeles Times, page A3, January 1, 2005.

EU makes decision regarding agreement with U.S. on energy-efficient labelling program for office equipment. The Commission of the European Union has issued a decision regarding the labelling program with the U.S. for energy efficient office equipment. The decision provides revised criteria for energy efficiency of computer monitors. Computer monitors that meet the specified criteria and power consumption limits may receive the European “Energy Star” label. Citation: Commission Decision 2005/42/EC, 2005 O.J. of the European Union (L 20) 24, 22 January 2005.

U.S. Trade Representative claims victory in WTO dispute with EU over food names. The U.S. Trade Representative has announced that the U.S. prevailed in the World Trade Organization dispute with the European Union (EU) over food names. It appears, however, that the Commission of the European Union disagrees with that interpretation of the WTO dispute settlement panel’s decision. At issue in the dispute are geographic food names, known as “geographical indications” (GIs). Examples of GIs are “Parma ham” and “Roquefort cheese.” The U.S. had challenged the EU system for protecting such GIs because it allegedly discriminates against U.S. products and disregards U.S. trademarks. – The WTO dispute settlement report has not yet been published. Citation: U.S. Trade Representative press release of 12/21/2004; European Report No. 2924 (December 24, 2004).