2005 International Law Update, Volume 11, Number 12 (December)

2005 International Law Update, Volume 11, Number 12 (December)

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

CHILD ABDUCTION

In case involving international abduction of children allegedly to escape abusive parent, Seventh Circuit reverses, relying on defense under Hague Abduction Convention that return would expose child to harm

Jennifer, a U.S. citizen, married Davy van de Sande, a Belgian citizen, in 1999 and they had two children. They eventually moved to Belgium. But not all was merry in their relationship. Jennifer alleged that Davy often beat and threatened her, as well as the children. One day, Jennifer took the children and returned to the U.S. Davy first obtained an ex parte custody decree in Belgium, and then sought the return of the children to Belgium. He filed an action in U.S. federal court.

The International Child Abduction Remedies Act, 42 U.S.C. Section 11601, implements the Hague Convention on the Civil Aspects of International Child Abduction (October 25, 1980, T.I.A.S. No. 11,670, 1343 U.N.T.S. 89). It permits parents to seek the return of children abducted to another member state.

Jennifer presented six affidavits describing Davy’s violent behavior and threats. The district court found most of the violence directed at Jennifer – not the children – and granted Davy summary judgment. Presumably, the court was influenced by the assumption that the Belgian legal system would provide sufficient safeguards in this case.

The U.S. Court of Appeals for the Seventh Circuit reverses and remands.

The abducting parent has a narrow defense under the Hague Convention. Under Article 13(b) of the Convention, the abducting parent may not have to return the child if “there is a grave risk that his or her return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation.”

The affidavits in this case could be clear and convincing evidence of “risk of harm” to the children if returned to Belgium. The issue is whether they prove a “grave” risk of harm, and whether the children should be returned under these circumstances.

“Return plus conditions (‘undertakings’) can in some, maybe many, cases properly accommodate the interest in the child's welfare to the interests of the country of the child's habitual residence. Often the bulk of the evidence concerning risk of harm will be found in that country and the left-behind parent's defense to charges of abuse may be more difficult and costly to prepare and present in the country to which the abducter has fled. But in cases of child abuse the balance may shift against return plus conditions. In a comment on "undertakings" ..., the State Department has advised that ‘if the requested ... court is presented with unequivocal evidence that return would cause the child a 'grave risk' of physical or psychological harm, ... then it would seem less appropriate for the court to enter extensive undertakings than to deny the return request. The development of extensive undertakings in such a context could embroil the court in the merits of the underlying custody issues and would tend to dilute the force of the Article 13(b) exception.’ The court added that ‘undertakings are most effective when the goal is to preserve the status quo of the parties prior to the wrongful removal. This, of course, is not the goal in cases where there is evidence that the status quo was abusive.’ ...”

“Concern with comity among nations argues for a narrow interpretation of the ‘grave risk of harm’ defense; but the safety of children is paramount. Jennifer presented at the summary judgment stage sufficient evidence of a grave risk of harm to her children, and the adequacy of conditions that would protect the children if they were returned to their father's country is sufficiently in doubt, to necessitate an evidentiary hearing in order to explore these issues fully. The hearing should be held promptly and conducted expeditiously in order to comply with the Convention's goal of expediting the return of abducted children to their country of habitual residence ...” [Slip op. 6]

Citation: Van de Sande v. Van de Sande, No. 05-2831 (7th Cir. December 7, 2005).

COMPETITION

On application of Australian Competition and Consumer Commission, federal court agreed that Commission had shown that U.S. subsidiary in Commonwealth had engaged in resale price maintenance on its skin care products and imposed monetary sanctions

Dermalogica PTY (respondent) is a wholesaler of skin care products. It is the Australian subsidiary of a United States corporation of similar name and markets the parent company’s products to retailers across Australia. As of the hearing date, over 700 retailers within Australia were acting as outlets for Dermalogica products.

Two of these retailers were doing business as “Fatal Attraction” and “Café Beauty Advanced Anti-Aging (Café Beauty).” Both are beauty shops offering a range of personal services to customers. The former is located in Melbourne, the latter in Sydney. Both of them were operating a website on which they offered respondent’s products for retail sale at discounted prices. Respondent looks upon its products as “premium” brands.

Suzette Cassie is the General Manager of Dermalogica in Australia; she is the sole resident director of the company, and a company secretary. In her view, the company prices its products towards the higher end of the market. It is a “professional product” that professional beauty salons use and sell. One cannot buy them in supermarkets or other retail stores.

This upscale image of its products is a main element of respondent’s marketing strategy. Respondent also has a system of recommended retail prices and it makes those recommended prices known to retailers on order forms and price lists that respondent sends out from time to time.

Respondent’s U.S. parent runs a website jointly with its Australian management. It provides the public and professional stockists with data about respondent’s products. It includes guidelines for stockists for retailing respondent’s products via the internet. Specifically, there are guidelines for the use of respondent’s name, logos and other images, plus declarations of respondent’s views about the retail pricing of its internet products.

Both Café Beauty and Fatal Attraction offered respondent’s products for sale on their websites at prices lower than respondent’s recommended retail price. It was respondent’s reaction to the salons’ discounting that gave rise to charges before the Australian Competition and Consumer Commission (ACCC or applicant) that respondent has transgressed the Trade Practices Act 1974 (Cth) (the TPA).

The TPA defines resale price maintenance (RPM) as follows: “(a) the supplier making it known to a second person that the supplier will not supply goods to the second person unless the second person agrees not to sell those goods at a price less than a price specified by the supplier; (b) the supplier inducing, or attempting to induce, a second person not to sell, at a price less than a price specified by the supplier, goods supplied to the second person by the supplier or by a third person who, directly or indirectly, has obtained the goods from the supplier; ... (f) the supplier using, in relation to any goods supplied, or that may be supplied, by the supplier to a second person, a statement of a price that is likely to be understood by that person as the price below which the goods are not to be sold.”

Respondent admitted that it took part in conduct that amounted to RPM under Section 96(3)(b) and (f) of the Act but it contested that its behavior came within Section 96(3)(a). The ACCC charged, however, that respondent let it be known to Fatal Attraction and Café Beauty that it would no longer furnish its products to them unless the salons agreed not to sell Dermalogica products at discounted prices. The respondent failed to substantially contest the applicant’s factual case at the hearing. Respondent denied that Ms. Mayne had threatened that respondent would withhold the supply of products if Fatal Attraction did not agree to sell at specified prices.

There was a printout from respondent’s U.S. parent company’s website called “Dermalogica website registration guidelines and policies” (the web policies). It featured, inter alia, the following relevant statements, “Deviating from current Suggested Retail Prices is strongly discouraged, ... A violation of this policy can result in account termination and legal action. ... Violating any of these provisions will result in retraction of web approval and/or account termination.”

Respondent made much of the fact that its parent corporation in the USA owned the website. It contended that the statements of policy were those of the parent corporation, that respondent’s Australian management did not adopt them on its own initiative and that respondent was not responsible for creating the website.

In any event, the applicant found that the facts showed that respondent’s various Australian representatives were consistently referring to the website as setting forth its own policies. They did so in such a way as to suggest that they adopted these policies as their own and voluntarily acted upon them.

The ACCC alleged that respondent’s conduct breached Section 48 of the TPA in that its conduct amounted to resale price maintenance under Section 96(3) of the Act. The ACCC asked the court to impose pecuniary penalties and injunctive relief as provided for by the TPA. The Australian Federal Court imposed a monetary sanction but decided not to issue an injunction.

For conduct to constitute resale price maintenance under Section 96(3)(a), the ACCC has to show, on the balance of probabilities that respondent made it known to each of the salons that it would not supply its products unless the salons agreed to stop discounting the prices of respondent’s products on their websites. It is clear that respondent did ask the salons not to discount and that they posited that the likely result of the discounting was that Dermalogica could cease supply.

The specific question here, of course, is whether the evidence suggests that respondent made it known that it would stop supplying the salons. In the Court’s view, a broader question is: what is the necessary degree of certainty that must be apparent to the second person in relation to the withholding of supply consequential on the second person’s failure to agree to maintain the supplier’s specified resale price? The Court agrees with the ACCC’ s positions and imposed a monetary penalty upon respondent in the amount of $250,000.

“I am satisfied that Dermalogica 'strongly discouraged' each of Fatal Attraction and Café Beauty from offering discounts on the recommended resale prices of Dermalogica products and that this discouragement was given force by the threat of withholding supply of goods. I am further satisfied that Dermalogica communicated that discouragement to Fatal Attraction with the requisite degree of certainty. That is, I consider that the communication indicated that it was likely that supply of goods was seriously threatened if the salon did not comply with Dermalogica’s wishes. In the case of Café Beauty, [one of respondent’s reps] was prepared to allow Mr Sleiman to sell at 10% less than the recommended retail price but at no lower price.” [¶ 53]

The TPA’s monetary penalty exists as an inducement to avoid interfering with price competition without being oppressive. Some of the factors the ACCC has to take into account in fashioning a penalty include: the nature and extent of the contravening conduct, the amount of loss or damage caused, any profit gleaned from the contravening conduct, the circumstances in which the conduct took place, the contravening company’s market share or market power, and the deliberateness of the conduct.

“Having regard to all of the above issues, with particular reference to the rash and ignorant nature of the conduct of Dermalogica and its agents between July and September 2002, and to the principle of deterrence, I consider the appropriate penalty to be, in relation to each of the two breaches of Section 48, $125,000. Were it not for Dermalogica’s cooperation with the commission the penalties would have been considerably higher. The total penalty thereby imposed on Dermalogica is $ 250,000.” [¶ 104]

The Court then takes up the ACCC’s request for injunctive relief. “Section 80 confers a broad power upon the court to grant an injunction ‘in such terms as the Court determines to be appropriate’. By reason of subsections (4) and (5), the court is empowered to grant an injunction even in the absence of factors that would, in the case of equitable injunctions, be considered necessary for the exercise of power.”

“However, the power is limited in that the injunction must be in terms that the court considers to be appropriate, which has been interpreted as requiring a connection between the contravening conduct and the future conduct that is prohibited by the injunction. The rationale for this is that where an injunction is made in terms that are too broad, the party enjoined by the injunction should not carry the burden of making an application to limit its scope. [Cite].” [¶ 107]

“Thus, the terms of the injunction will not be ‘appropriate’ if, on its face, it operates upon a range of conduct some of which does, but some of which does not, have the relationship required by Section 80 with contravention of the Act. The injunction should not prohibit conduct falling outside the boundaries drawn by Section 80. [Cite]. The same limitation applies to mandatory injunctive relief. It is, in my view, no support for the grant of an injunction which, from the outset, has an operation outside the boundaries of Section 80, to say that it is open for the party enjoined to apply under Section 80(3) to vary the injunction so as to bring its operation wholly within proper limits. The party in question should not be placed under any such obligation in the first place.”

“A relevant factor to consider in determining whether to grant an injunction pursuant to Section 80 of the Trade Practices Act is whether the existing sanctions for the conduct to be the subject of the injunction, found in the Trade Practices Act itself, require to be supplemented by the availability of the range of sanctions applicable to contempt of court. The purpose of granting an injunction to restrain conduct already prohibited by legislation can only be to add to whatever consequences the legislation attaches to that conduct the additional consequences of a possible finding of contempt of court by failure to comply with an injunction. In each case, it is a question whether the conduct concerned warrants the application of those more stringent consequences.” [¶ 109]

“I do not consider that the circumstances of this case call for the grant of an injunction in addition to the pecuniary penalty I have imposed. I think it unlikely that Dermalogica will engage in any further proscribed acts of resale price maintenance. I think the pecuniary penalty I have imposed will be adequate to serve the specific deterrent purpose (the general deterrent purpose is not significantly furthered by grant of an injunction). Nor, bearing in mind the evidence of Dermalogica’s size and market power already discussed, do I think it likely that any substantial damage will occur to Dermalogica’s stockists or to the consumer public were Dermalogica to engage in such conduct.” [¶ 111]

Citation: Australian Competition and Consumer Commission v. Dermalogica Pty., Ltd., 2005 FCA 152, 215 A.L.R. 482 (Aust. Fed. Ct. 2005).

EXTRADITION

New South Wales Federal Court of Appeal rules that evidence supplied by United States with its request that Australia extradite one of its residents for his leading role in conspiracy to pirate and distribute millions of dollars of software in U.S. and elsewhere showed conformity to requirement of “dual criminality”

On March 12, 2003, a federal grand jury sitting in Virginia indicted Hew Raymond Griffiths (appellant) having a screen name of “Bandido,” with conspiring to engage in, and to have in fact engaged in, internet software piracy in the United States in violation of its federal criminal copyright laws. The infringed items included copyrighted software, computer games and movies.

The violations consisted of their reproduction and distribution over the Internet, during 2000-2001, of at least ten (10) or more copies of one or more of the copyrighted works having a total estimated retail value of many millions of dollars. The criminal organization had about 60 members and called itself “Drink or Die” (DOD).

The American authorities have asked for his extradition from Australia under the Extradition Act 1988 (Cth) (the Act). Although the U.S. has alleged that appellant has been committing these offenses in the United States, at all pertinent times appellant was residing in Australia. Requesting his extradition under the Extradition Act of 1988 (Cth) (the Act), the U. S. filed an affidavit that described the investigations leading to the charging of appellant, the grand jury’s indictment and the charged offenses together with their elements and the evidence supporting them.

A magistrate sitting in New South Wales ruled that, pursuant to Section 19(10) of the Act, appellant was not eligible for surrender. In review proceedings under Section 21 of the Act, a judge of the Federal Court in Sydney held to the contrary.

Appellant appealed. Although he raised, inter alia, several issues about the sufficiency of the supporting documents, the more novel ground of appeal lies in the question of whether the U.S. request has satisfied the “dual criminality” demands of Section 19 (2)(c) of the Act. The Federal Court of Appeal, in a per curiam opinion, dismisses the appeal and holds that the appellant is eligible for surrender in relation to both extradition offenses.

DOD members began their pirating with the work of “suppliers” who upload new software on to DOD’s “drop site” before the manufacturers’ public release date. (The U.S. describes the drop site as a secure computer site hosted by a DOD member on the computer network of the Massachusetts Institute of Technology in Boston.)   Other DOD members known as “crackers” would then remove the software from the drop site and use their skills to “crack” the software’s embedded copyright protection. Next “testers” would give the software a quality test, “packers” would break it apart and “couriers” would prepare it for distribution to DOD computer storage sites worldwide.

The Appellate Court explains further. “For the purposes of Section 19(2) of the Act, the conduct constituting the extradition offences in the U.S., or equivalent conduct, must be such as would have constituted an extradition offence or offences in the part of Australia where the Section 19 proceedings are being conducted (the counterpart offences).”

“The counterpart offences relied upon in the present Section 19 proceeding are offences against Commonwealth laws. They are conspiracy under Section 11.5 of the Criminal Code and copyright infringement under Section 132(2) of the Copyright Act 1968 (Cth). ... Section 132(6) imposes a territorial limitation on this offence by providing that Section 132 only applies in respect of acts done in Australia.” [¶¶ 42-43]

“Accordingly, we agree with [the lower court’s] conclusion that there was a sufficient statement of the conduct constituting the conspiracy offence in the supporting documents and that it could be discerned from the paragraphs in count 1 of the indictment when considered in light of [the U. S. prosecutor’s] explanation of the necessary elements of the offence. We reject this ground of appeal.” [¶ 64-65]

The Court of Appeal then turns to the double criminality element. “The alleged insufficiency of the statement of conduct for Section 19(2)(c)’s double criminality purposes is at the heart of this ground. The contention is that to assert that copyright exists in a work and has been infringed is to assert legal conclusions according to the law of a particular jurisdiction, which conclusions are derived from the application of legal rules to ascertained facts. ... This is because the supporting documents are insufficient to indicate whether (a) the material which was reproduced or distributed in the U.S. would attract copyright protection in Australia or (b) the reproduction or distribution constituted an infringement in this country.”

“Nonetheless, what is clear from the supporting documents is that there is a common field of discourse concerning copyright between the two countries. ... Though not a matter of evidence, counsel for the U.S., in drawing attention to Section 184 of the Copyright Act and the Copyright (International Protection) Regulations 1969 (Cth), noted that the U.S. was a party to the Berne Convention and was a member of the World Trade Organisation.” [¶ 73]

“Before dealing with the parties’ contentions, it is necessary to comment briefly on Section 19(2)(c). For present purposes it is sufficient to reiterate observations made ... in Dutton v O’Shane (2003) 132 FCR 352; 200 ALR 710 at [58]: ‘The relevant inquiry mandated by Section 19(2) of the Act is not whether there is a correspondence between the legal elements of offences under the municipal criminal laws of the requesting State and of the relevant part of Australia. It is whether the conduct constituting the offence in the requesting State constitutes ... an extradition offence in that part of Australia in which the proceeding is conducted. The relevant inquiry is conduct based, hence the significance of the statement of the conduct constituting the offence in Section 19(3)(c)(ii).’” [¶ 77].

“The reason it is said the above matters establishing notional Australian copyright and infringement must be made out factually in the supporting materials is because an assertion in the supporting documents that there has been an infringement of a copyright work (that is, under U.S. law) is not determinative of any issue under the Australian Copyright Act. The relevant work may not be copyright in Australia. The copyright owner may be different in Australia. And the ‘infringement’ of copyright may not be an infringement under Australian law.”

“To illustrate the point, it is said that if the supporting materials had asserted that [appellant] had copied an identified computer program, and that computer program was not copyright under Australian law, then [appellant] could not be extradited -- he would not have committed an offence under Australian law. If, instead of identifying the work, the U. S. materials had merely asserted that [appellant] had copied a ‘copyright computer program’, then the mere lack of detail and absence of supporting facts could not transform what would otherwise be a non-extraditable act into an extraditable act.” [¶¶ 80-81].

“As the lower court judge correctly stated: ‘the exercise of practical judgment which the Magistrate was required to carry out was to consider whether, if Mr Griffiths, while physically located in the United States, made an agreement, perhaps initially in the United States, to steal, reproduce and distribute Australian copyright works by obtaining access to a computer system situated in Australia, and by carrying out five overt acts of the conspiracy, either by himself or through co-conspirators in Australia, his conduct would necessarily involve the offence of conspiracy to infringe copyright in New South Wales. The answer to this is plainly that it would constitute such an offence.’” [¶ 91]

“It is, in our view, clearly the case that the conspiracy alleged in this matter was a continuing offence [cite] and that the conduct by virtue of which this particular conspiracy, in this particular case, was alleged to have been committed included the continuing performance of the agreement up to and including the [copyright infringements].”

“That conduct included not merely such acts as may have been performed by [appellant] personally but the conduct constituting its performance by others: on the admissibility of evidence of the acts and declarations of others against an accused conspirator. [Cite].”

“The conduct in performance so described in the indictment (but especially in the overt acts) as also in the affidavits, occurred in the U.S., and this was so in relation to actions of [appellant] notwithstanding his physical presence in New South Wales. Simply by way of illustration of this, three of the overt acts relied upon in the indictment related to the installation and use of the DOD site, ‘Fatal Error’ in Dulles, Virginia.” [¶¶ 94-96]

“Whatever may have been the particular place of origin of the conspiracy in so far as it concerned [appellant], the conduct constituting the offence, given its continuing character, can properly be said to have occurred in the U.S. and this includes [appellant’s] own conduct notwithstanding his actual physical presence in New South Wales.”

“We do not refer to this, for the purpose of inquiring impermissibly into whether the U.S. properly had jurisdiction to entertain the matter. [Cite]. Rather it identifies the U.S. conduct that is to be considered for the double criminality purposes of Section 19(2)(c). It is conduct, we would emphasise, that is devoid of any relevant extra-territorial element.”

“In our view, the court below committed no error in making the factual transposition [noted] above, nor in reaching the conclusion he did in light of it.” [¶¶ 97-99].

“[The U.S. affidavit] and the exhibited indictment together indicate the context in which the conspiracy and copyright infringement occurred. It was one in which pirated software was to be provided to the underground Internet software piracy community. When a pirated product was released by DOD couriers, DOD members world-wide would be able to access the cracked software and, [according to the affidavit,] ‘were able to provide it to anyone they wished; as a result, unauthorised copies of copyrighted software were soon available to anyone with a computer and access to the Internet’.” [¶ 105]

“Given the object of the conspiracy, the manner of its performance and the resultant open access it gave to software that was otherwise intended for commercial gain, it would in our view be open properly to infer [cite] that the release by DOD of any cracked software programme to its own sites would of itself without more ‘[affect] prejudicially the owner of [that] copyright’ [under] Section 132(2)(b). The reason for this is that an alternate and illegitimate source for the owner’s work knowingly would have been created with the intent that it be used by members who would make it available to others. The evidence in the supporting documents is that such sources were so used.”

“This is not the basis upon which his Honour found that the requirement was made out, though it would be our preferred basis for concluding that the double criminality requirement had in this respect been satisfied.” [¶¶ 107-108]

Citation: Griffiths v. United States, 2005 F.C.A.F.C. 34; 214 A.L.R. 665 (Fed. Ct. App. Aust. 2005).

INDUSTRY REGULATION

British Columbia Court of Appeal rules that B.C. Vegetable Marketing Commission’s extraordinary levy on greenhouse tomato growers to pay expenses of responding to U.S.’s dumping action against them did not exceed its powers

The Vegetable Marketing Commission (VMC) is a regulatory body set up under the British Columbia Vegetable Scheme to administer the plan under the supervision of the Vegetables Marketing Board.(VMB). In 1996, the VMC appointed B.C. Hothouse Foods, Inc. (Hot House) as the sole agent for marketing greenhouse vegetables grown in the Lower Mainland area of BC and on Vancouver Island. Hot House then entered into Grower Marketing Agreements (GMAs) with the growers it represented.

In 2000, the United States filed a trade action against Canadian greenhouse tomato growers. It alleged that the growers were dumping, that is, selling their goods in the U.S. at prices lower than they were asking in B.C. Hot House took it upon itself to orchestrate the B.C. Industry’s response to the action. In 2001, an outfit calling itself “Global Growers” and others, asked the VMC to choose Global as their marketing agent to replace Hot House.

One month later, the VMC laid a special levy upon all greenhouse tomatoes produced in 2001 in order to pay the costs of the trade dispute. It also recommended to the VMB that it accord agency status to Global. At the outset, Global growers did not ask the Commission to cancel their GMA’s with Hot House; it did so in 2002, however, after it became clear that the parties could not agree on how to go about the terminations. The VMC declined to comply. The Board then agreed to consider written submissions about the GMA terminations and other issues but turned down Global’s request for a full hearing.

This led Global to withdraw from the review process, and to seek an injunction to prevent the VMB from proceeding. The B. C. court of first instance rejected that application. In July 2002, the VMC came out with its recommendations to the Board. The following month, the Governor General in Council adopted a regulation that empowered the VMC to impose levies on growers and to use the proceeds to pay litigation expenses and to make up for losses from the sale or disposal of vegetables during any period of time.

In September, the VMB issued its report. In dismissing Global’s application for judicial review, the court found (1) that the Board’s action lay within with its general supervisory authority and (2) that the evidence fully supported its findings of fact. The court held that the Commission had virtually unlimited powers to regulate the production and marketing of vegetables, including the authority to collect levies. The major problem lay in Global’s unwillingness to deal with Hot House, or to answer its request for mediation, or to agree to the appointment of an arbitrator. This forced the court to appoint an arbitrator as requested by Hot House.

BC Vegetable Greenhouse, South Alder Greenhouses and Merom Farms appealed from two judicial rulings. The first was from the dismissal of their application for judicial review of VMB decisions on the marketing of greenhouse tomatoes; the second was the granting of Hot House’s application for the appointment of an arbitrator relating to grower marketing agreements. The British Columbia Court of Appeal, however, unanimously dismisses.

The Court first found no merit in the claim that complex questions of law were at stake. Rather, in its view, the case turns on the applicability of clear rules to facts that are not in dispute.

“Whether or not the Commission had the authority to affect or cancel or vary the GMAs, and in particular the covenant of exclusive dealing, it did not purport or intend to do so. It left the question of the effect, if any, of the ‘Agency Decision’ ... on the GMAs to be determined in accordance with their terms. This disposition was upheld, as it were, by the Board.”

“In my view, the Agency Decision did not ‘render unenforceable’ the covenants in those agreements requiring the appellants to market exclusively through Hot House. For one thing, ... none of the appellants were parties to Global’s agency application. But more importantly, there is no doctrine of law - short of the law of frustration of contract or illegality - which have the effect of somehow rendering a term in a private law contract ‘inoperative’. This is not a situation where a statute requires the appellants to do one thing but a contract prohibits that thing. The Agency Decision gave the Global shareholders the right to market tomatoes outside the territory of Western Canada and the Interstate-5 corridor.” [Slip op. 5-6]

“Indirectly, this gave the appellants a ‘right or option’ to sell tomatoes to Global for that market. But the Commission did so subject to the express understanding, ... that ‘any existing GMA must be determined in accordance with its terms unless the parties to the GMA reach another agreement’.”

“Equally important, the appellants were under no compulsion to market through Global. Thus they were not required by the new decision to breach their existing new contracts. If Hot House seeks damages under the GMAs, that will not defeat the Commission’s marketing policy as alleged.”

“It follows, in my view, that the dispute as to the effect of the appellants’ alleged breach of the GMAs stands to be determined by the arbitrator under those agreements. I therefore see no error in the trial judge’s conclusion on this point and would dismiss this aspect of the appeal.”

“Turning next to the levy question, I am of the view that an order distributing the costs and expenses associated with the U. S. anti-dumping investigation does not invade the trade and commerce power of the federal government. The question, of course, is the object or purpose of the provincial scheme. Incidental effects on markets outside the province are not fatal if the pith and substance remain of provincial concern. ... Looking at it this way, I conclude that order 08/01 was constitutionally valid. Its object or purpose was to deal with the costs of a legal endeavour undertaken to benefit B.C. producers.” [Slip op. 7-8]

“The appellants also question whether there was statutory authority to make the two levy orders, 08/01 dated August 15, 2001 and 09/02 dated September 18, 2002. (In between these dates, of course, the federal government amended the B.C. Vegetable Order to add a new section 4 referring to levies.) I believe there [already] was such authority in ... the Natural Products Marketing Act of 1996 (B.C.) ... This power was conferred on the Commission by ... the Vegetable Scheme, B.C. Reg. 96/80.”

“If I am wrong on the vires issue, then the federal order SOR 81-49 entitled ‘B.C. Vegetable Order’ effectively gives the Commission for federal purposes ‘all or any powers like the powers exercisable by it in relation to the marketing of vegetables locally within the province and the provincial plan.’ In the result, this aspect of the second appeal must also fail.”

The final issue was that of retrospectivity. The Court is not convinced that the second levy order is retrospective. “In my view, the levy order did not ‘look to the past and attach new consequences to a completed transaction’ [Cite]. Producers of tomatoes in the 2002 year had the levy imposed on them in that year. No books had to be ‘reopened’. The allocation of the levies was based on production in the previous year, but this was merely a method of calculating the fair allocation.”

“It did not mean that a person who had produced in 2001 but not in 2002 became liable for the levy. The charge was exacted from current production and became a debt due in 2002. It did not interfere with a vested right or change the consequences of a completed transaction. In the result I would also dismiss this final aspect of the appeal.” [Slip op. 8-10]

Citation: B.C. Vegetable Greenhouse I, L.P. v. British Columbia Marketing Board Van. Reg. No. CA031329 [2005] B.C.J. No. 2222; 2005 B.C.C.A. 476; (Sept. 23, 2005).

PROBATE

In dispute over rights to German accounts of deceased naturalized U.S. citizen, German trial court rules that U.S. law applies and that Letters of Administration should issue to the estate

The following probate dispute involves matters of citizenship, conflict of laws, and location of assets in a probate matter with international implications.

Decedent H. E. was a German citizen by birth. He later married a U.S. citizen and eventually resided in Virginia. In the year 2000 he became a U.S. citizen. In 2001, he wrote a “Last Will and Testament” and established a trust for the benefit of his wife. The will provided that his entire estate would be held by the trust upon his death. After his death in 2004, the Trustee petitioned the Frankfurt Trial Court, Probate Division, for a Testamentsvollstreckerzeugnis (a certificate allowing execution on assets, apparently similar to a “Letter of Administration” in U.S. probate law) to access bank accounts that the decedent had retained in Germany. Two of decedent’s children from a prior marriage opposed the petition, claiming that Decedent was still subject to German law and that the forced share should be paid to them under that law.

The Court rules that the certificate should issue to the Trustee. First, Decedent’s life was centered in Virginia, as evidenced by the Death Certificate, the Will, the Trust Agreement, the filing of the will in Virginia probate court, the naturalization certificate, as well as the declaration of Decedent’s wife. Thus, Decedent’s residence was in Virginia.

Second, Decedent held only U.S. citizenship, not dual citizenship. According to Section 17, Number 2, of the German Citizenship Law (StAG), a German person who naturalizes in another country loses the German citizenship unless he/she has written permission to retain the German citizenship. It does not appear from the record that Decedent had such a permission. Decedent’s wife declared that he had only U.S. citizenship. Thus, Decedent lost his German citizenship upon naturalization in the U.S.

Third, Decedent prepared a valid will under local (Virginia) law that provides that all of his assets (thus including the German bank accounts) are subject to the Trust. The Trust complies with the German law principle of Perpetual Estate Administration (Dauertestamentsvollstreckung) within the meaning of Section 2209 of the Civil Code (BGB).

Moreover, the legal situation does not change if German probate law is applied to this case. German probate law requires a legal interpretation where there is a beneficiary of the estate (meaning that a person will receive assets from the estate). In this case, the Trustee should be viewed like an estate executor under German law.

The Court notes that its task here is not to determine who are the beneficiaries of the estate or whether the forced share applies. Under German law, the forced share is a civil claim that must be pursued separately in civil court. The Court notes that Virginia does not recognize a forced share in estate matters.

Citation: Amtsgericht Frankfurt am Main - Nachlassgericht – 51 VI 2451/04 E (December 19, 2005).

SERVICE OF PROCESS

Alberta Court of Appeal applies relaxed standard on international service to allow Canadian plaintiff to serve process on American manufacturers of allegedly defective glue which Canadian plaintiff marketed to its customers in Alberta

Formations, Inc. (plaintiff) has been selling glue to its customers made by the American companies TACC International Corporation, ITW TACC, a Division of Illinois Tool Works Inc., and Illinois Tool Works Inc.(proposed defendants) in Alberta, Canada. The Canadian customers brought seven lawsuits against the defendants alleging that the glue was defective. The defendants settled six of the lawsuits without contribution from the plaintiff.

The plaintiff’s statement of claim alleged breach of contract, negligence and negligent misrepresentation arising from the manufacture and sale of the glue; it asked for damages for the following losses; profits; business opportunity; goodwill; and reputation and for reimbursement for costs associated with the investigation and defense of the customers’ lawsuits. The plaintiff also applied for service of process ex juris before the judge who was serving as case manager of the customers’ lawsuits.

A plaintiff’s officer averred in his supporting affidavit (but without quantifying them) that the plaintiff had suffered losses and damages and had incurred costs and expenses. During cross-examination on his affidavit, the officer admitted that many of the unpaid customer accounts included materials in addition to the glue. He also conceded that plaintiff had not sued the customers to recover the outstanding accounts. Although the defendants’ insurer had defended the customers’ lawsuits, the affidavit claimed that the plaintiff had to spend additional sums.

The officer accepted that the future loss claim might be conjectural but alleged that the plaintiff was aware that it had been losing business for three years. According to the affiant, some of plaintiff’s lost business came from other customers who thought that the plaintiff was inadequately supporting those customers who had bought the flawed glue.

The parties agreed before the chambers judge that the test was whether the plaintiff had set forth a good arguable case. The chambers judge decided that plaintiff had fallen short of meeting that test.

On appeal, however, the plaintiff urged that the chambers judge failed to apply the principle that the standard of proof in a proceeding for service ex juris has a very low threshold. The Alberta Court of Appeal agrees and reverses.

“In our view, the chambers judge erred in his application of the test to the evidence. The chambers judge did not find that the evidence failed to support the causes of action pled. It is clearly arguable that an action for breach of contract or negligence may arise when a defective product is supplied to a retailer for resale to customers. Rather, the chambers judge concluded that the evidence was insufficient to establish a good arguable case on the damages aspect of the claim.”

“The standard of proof for service ex juris is lax, but there must be some evidence to support the causes of action pled. However, because service ex juris is usually sought at an early stage in the proceedings, the applicant is not expected to know the full extent of the case. [(Nova, an Alberta Corporation v. Grove (1982), 39 A.R. 409 at 414-415 (C.A.)).]” [¶¶ 8-9].

“Although the [plaintiff’s] officer conceded some aspects of the damages claim, there was uncontradicted evidence that one of the customers’ lawsuits was outstanding, that the [plaintiff] had incurred uninsured legal costs in defending the customers’ lawsuits and that the [plaintiff] had suffered a loss of business over a three year period. Some of the damages alleged are of the type that usually arise from breach of contract or negligence in business relationships. Quantification of those types of damages may require expert evidence. It is too early to require that sort of evidence at the service ex juris stage.”

“Accordingly, the uncontradicted evidence before the chambers judge was sufficient to meet the test of a good arguable case on damages at the service ex juris stage. The appeal is allowed and an order for service ex juris is granted.” [¶¶ 10-12].

Citation: Formations Inc. v. TACC International Corp., Docket No.: 0503-0222-AC; [2005] A.J. No. 1307; 2005 A.B.C.A. 339 (Alb. Ct. App., Oct. 5, 2005).

VIENNA CONVENTION

In death penalty case, where Petitioner is appealing denial of habeas corpus writ, Eleventh Circuit denies stay where Petitioner  alleges Vienna Consular Convention violations but had ailed to raise said issues on direct appeal

A state-court jury in Miami-Dade County, Florida found Krishna Maharaj (“Petitioner”) guilty of two counts of first degree murder, two counts of kidnapping, and one count of unlawful possession of a firearm while engaged in a criminal offense. Sentenced to death for one of the murder counts, life imprisonment without the possibility for parole for twenty-five years for the second murder count, two life sentences for the kidnapping counts, and fifteen years’ imprisonment, Maharaj appealed to the Florida Supreme Court. The Florida Supreme Court upheld the convictions and sentences.

Maharaj then petitioned for federal habeas relief and the application was referred to a federal magistrate judge, who recommended denying relief on all claims. Petitioner objected to the Report and Recommendation, the district judge conducted a de novo review of the Petition and denied relief as to each claim. Petitioner filed a timely appeal with the Eleventh Circuit, alleging violations of the Vienna Convention.

The U.S. Court of Appeals for the Eleventh Circuit, however, affirms.

After filing his appeal with the Eleventh Circuit, Petitioner asked for a stay pending resolution of a motion he filed in state court seeking post-conviction relief on the ground that his rights under the Vienna Convention were violated when the arresting officers failed to inform him that he could contact the British Consulate.

Article 36(1)(b) of the Vienna Convention [21 U.S.T. 77, T.I.A.S. 6820, 596 U.N.T.S. 261, effective for U.S. December 24, 1969], to which the United States and the United Kingdom are parties, states that upon arrest, a foreign national has the right to contact the consular post of his home country, and that the arresting authorities must inform the detainee of that right.  Once a detainee is informed of this right, the arresting authorities must forward any desired communications to that foreign office. Article I of the Optional Protocol to the Vienna Convention [21 U.S.T. 325, T.I.A.S. 6820, 596 U.N.T.S. 487, effective for U.S. December 24, 1969] further states that "[d]isputes arising out of the interpretation or application of the Convention shall lie within the compulsory jurisdiction of the International Court of Justice."

Petitioner argues that a stay would be appropriate because he was never informed of his right in violation of the Vienna Convention and that the state courts should have considered the merits of his claim.

In deciding whether to stay or dismiss the case because of concurrent state litigation, the Eleventh Circuit applies the factors delineated in Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976). In particular, the court weighs whether there is a reasonable probability that the state court action will be resolved in such a way as to “moot” any of the issues before the court.

In the Avena case, the International Court of Justice (I.C.J.) held that an arresting authority must notify a foreign national of his rights regarding contact with the local consulate once the detaining officials realize the person is a foreign national, or once there are grounds to believe the person is a foreign national. Case Concerning Avena and Other Mexican Nationals, 2004 I.C.J. 12 (Mar.31). The I.C.J. further opined that the application of state procedural default rules prevented full effect from being given to those rights accorded under Article 36. However, Florida’s state courts are bound by the Supreme Court’s decision in Breard v. Greene, 523 U.S. 371 (1998). In Breard, the Court unambiguously held that a habeas petitioner’s Vienna Convention claim is procedurally barred in federal court when not raised in the state court proceedings.

“The Court noted the well-recognized principle of international law that ‘absent a clear and express statement to the contrary, the procedural rules of the forum State govern the implementation of [a] treaty in that State.’ The Supreme Court has not retreated from its position in Breard, and none of the recent developments cited to us call the holding of Breard into substantial question, let alone overrule Breard. Thus, there is no reasonable probability that Florida's state courts could find themselves free of the constraints of Breard, regardless of the I.C.J.'s holding in Avena.” [Slip op. 10-11]

Even if the Florida court should consider the Vienna Convention argument despite its procedural default rule, the claim would likely fail on the merit because an individual does not have standing to raise a claim under the Vienna Convention according to Gordon v. State, 863 So.2d 1215 (Fla. 2003). “The Preamble is clear; the Convention is not intended to benefit individuals. The State Department’s interpretation of the treaty ... is also unambiguous; the only remedies for a violation of the Vienna Convention are diplomatic, political, or derived from international law.” [Slip op. 11]

“Because of the Supreme Court’s clear holding in Breard that violations of the Vienna Convention are subject to procedural default rules and the decisions of the Florida Supreme Court that Article 36 does not confer judicially enforceable individual rights, we remain unpersuaded that there is a reasonable probability Maharaj will prevail in the parallel state litigation.” [Slip op. 12]

Therefore, the Eleventh Circuit declines the stay.

Citation: Maharaj v. Secretary for the Dep't of Corrections, No. 04-14669 (11th Cir. December 15, 2005).

WAR CRIMES

Eritrea-Ethiopia Claims Commission issues partial awards against both parties, citing violations of customary international law and the 1949 Geneva Conventions

The Eritrea-Ethiopia Claims Commission at the Permanent Court of Arbitration in The Hague, The Netherlands, has issued six partial war-related awards. The 1998-2000 border war between Eritrea and Ethiopia claimed the lives of an estimated 70,000 people. The Commission was established by Eritrea and Ethiopia through an agreement signed on December 12, 2000, in Algiers. The purpose is to decide any damage claims that the two countries have against each other. The Commission issued its first decisions in August 2001.

The applicable law of the following awards is customary international law, including customary international humanitarian law as exemplified by relevant parts of the four Geneva Conventions of 1949. Eritrea and Ethiopia acceded to the 1949 Geneva Conventions on August 14, 2000. The awards of December 19, 2005 are:

- Partial Award - Prisoners of War - Eritrea’s Claim 17: Ethiopia held approximately 2,600 Eritrean Prisoners of War (POWs). Ethiopia is liable for failing to prevent abuse of Eritrean POWs, for frequently depriving Eritrean POWs of footwear during long walks, for forced indoctrination of Eritrean POWs, for deficient nutrition and medical care of Eritrean POWs, and for delaying their repatriation in 2002.

- Partial Award - Prisoners of War - Ethiopia’s Claim 4: Eritrea held approximately 1,100 Eritrean POWs. For example, Eritrea is liable for denying the Red Cross access to Ethiopian POWs, for failing to protect the lives of Ethiopian POWs at and after capture, for permitting physical abuse of Ethiopian POWs, for depriving Ethiopian POWs of footwear during long walks, for the confiscation of personal property of the Ethiopian POWs, and for failing to provide for the bare necessities of the Ethiopian POWs.

- Partial Award - Central Front - Eritrea’s Claims 2, 4, 6, 7, 8 & 22: Ethiopia is liable, for example, for the actions of its military personnel, including the looting and stripping of buildings in Tserona Town and its cemetery during occupation, for the destruction of several buildings, and for failing to prevent rapes committed by its soldiers.

- Partial Award - Central Front - Ethiopia’s Claim 2: For instance, Eritrea is liable, for example, for the physical abuse of civilians, for allowing the looting and stripping of Zalambessa Town, for the unlawful destruction of 75 percent of the structures of the same town, for failing to prevent the rapes committed by its soldiers, and for not taking precautions to prevent two of its aircraft from dropping cluster bombs near a school and its residential neighborhood.

- Partial Award - Civilians Claims - Eritrea’s Claims 15, 16, 23 & 27-32: Ethiopian nationals who acquired Eritrean nationality through qualifying to participate in the 1993 referendum on Eritrean self-determination acquired dual nationality of both countries. Ethiopia is liable, for example, for erroneously depriving some Ethiopians who were not dual nationals of their Ethiopian nationality, and for permitting local farmers, militia or police to forcibly expel rural people who were mostly Ethiopian from rural areas near the border.

- Partial Award - Civilians Claims - Ethiopia’s Claim 5: Eritrea is liable, for example, for failing to protect Ethiopian in Eritrea who were not in detention from violence by police and the civilian population, for detaining Ethiopians without a legal basis, and for failing to ensure the safe and humane repatriation of departing Ethiopians.

Nine claims remain pending with the Commission.

Citation: Permanent Court of Arbitration, Eritrea-Ethiopia Claims Commission, Partial Awards issued on December 19, 2005. The written decisions are available on the website of the Court at www.pca-cpa.org; see Reuters press release of December 21, 2005, published on www.cnn.com.

Canada to participate in EU crisis management operations. The Council of the European Union (EU) has approved the Agreement between the European Union and Canada establishing a framework for the participation of Canada in the European Union crisis management operations under the European Security and Defense Policy (ESDP). The Agreement was signed in Brussels on November 24, 2005, and provides, for example, that Canada may associate itself with the Joint Action that the EU takes in a crisis situation; that Canada shall contribute to the financing of the EU civilian crisis management operation; and that Canadian personnel shall act according to the necessities of the EU operation. – The EU is developing a full range of conflict prevention and crisis management abilities, as defined in the Treaty on European Union (the “Petersberg tasks”). In addition, the EU has established a “Rapid Reaction Mechanism” for urgent interventions in crisis situations. – Canada has participated in several EU-led operations, including the EU Police Mission in Bosnia and Herzegovina, and the Operation Artemis in the Democratic Republic of Congo. Citation: 2005 Official Journal of the European Communities (L 315) 20, 21, 1 December 2005; further information is available on the EU website “europa.eu.int/comm/external_relations/cpcm/cm.htm”.