2007 International Law Update, Volume 13, Number 6 (June)

2007 International Law Update, Volume 13, Number 6 (June) 

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

ANTI‑SUIT INJUNCTION

Eighth Circuit decides that anti‑suit injunction is inappropriate where Japanese company intends to file suit under Japanese “clawback statute” to recover amount of U.S. court judgment after it has satisfied it

Japanese‑based Tokyo Kikai Seisakusho, Ltd. (Defendant), one of the Defendants, and Goss International Corporation (Plaintiff), a Delaware company, both manufacture and supply newspaper printing presses and press additions. Between 1991 and 2000, Defendant allegedly began “dumping” its products, that is, selling them in the U.S. at prices substantially below the market value of its similar products in Japan. During that period, Defendant sold $125,000,000 worth of printing press additions in the US. Plaintiff, on the other hand, was losing contracts because customers expected it to lower its prices to match Defendant’s predatory prices. In 2000, Plaintiff did not make a single printing press equipment sale. Plaintiff sued the Japanese Defendant alleging violations of the Antidumping Act of 1916 (the 1916 Act), 15 U.S.C. Section 72 (repealed 2004). The law “made it unlawful for foreign persons to sell imported articles within the United States at a price substantially less than the actual market value or wholesale price at the time of exportation, with the intent of destroying or injuring an industry in the United States.” [Slip op. 2]. A district court awarded Plaintiff a judgment that totaled more than $35,000,000.00.

Congress repealed the 1916 Act on December 3, 2004. The repeal did not affect Plaintiff’s judgment, however, because it was prospective. Shortly thereafter Japan enacted The Special Measures Law concerning the Obligation to Return Profits Obtained pursuant to the Antidumping Act of 1916 of the United States (SML), a so‑called “clawback” statute, It authorized Japanese corporations and nationals to sue in Japanese courts for recovery of the full amount of any judgment, plus interest, attorney fees and costs, awarded under the 1916 Act.” [Slip op. 3].

On appeal, the Eighth Circuit affirmed the jury verdict and damages award. The U.S. Supreme Court denied Defendant’s petition for writ of certiorari. Prior to Defendant’s payment of the judgment, Plaintiff obtained a preliminary and permanent antisuit injunction to prevent Defendant from availing itself of the SML in the Japanese courts. Defendant appealed to the

U.S. Court of Appeals for the Eighth Circuit, which sets aside the injunctions.

The Court then explains its ruling. “The propriety of issuing a foreign antisuit injunction is a matter of first impression for our circuit. Other circuits having decided the issue agree that ‘federal courts have the power to enjoin persons subject to their jurisdiction from prosecuting foreign suits¼ the circuits are split, however, on the level of deference afforded to international comity in determining whether a foreign antisuit injunction should issue.” [Slip op. 4].

“The First, Second, Third, Sixth, and District of Columbia Circuits have adopted the ‘conservative approach,’ under which a foreign antisuit injunction will issue only if the movant demonstrates (1) an action in a foreign jurisdiction would prevent United States jurisdiction or threaten a vital United States policy, and (2) the domestic interests outweigh concerns of international comity¼ under the conservative approach, ‘[c]omity dictates that foreign antisuit injunctions be issued sparingly and only in the rarest of cases.’ Gau Shan Co. v. Bankers Trust Co., 956 F.2d 1349, 1354 (6th Cir. 1992). (citing Laker Airways Ltd. v. Sabena, Belgian World Airlines, 235 U.S. App. D.C. 207, 731 F.2d 909, 927 (D.C. Cir. 1984))” [Slip op. 4].

“In contrast, the Fifth and Ninth Circuits follow the ‘liberal approach,’ which places only modest emphasis on international comity and approves the issuance of an antisuit injunction when necessary to prevent duplicative and vexatious foreign litigation and to avoid inconsistent judgments.” [Slip op. 5]

The Eighth Circuit adopts the conservative approach for determining whether a foreign antisuit injunction should issue. The Court then considered the proper scope of jurisdiction under the All Writs Act. “Although the All Writs Act, 28 U.S.C. Section 1651(a), authorizes federal courts to ‘issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law,’ the Act does not create an independent source of federal jurisdiction.” [Slip op. 10].

The Court then distinguished the circumstances present in this appeal from those facing the district court. “In this case, at the time the district court issued the preliminary antisuit injunction, the district court clearly possessed jurisdiction over the case and parties pursuant to 28 U.S.C. Section 1331, and [Defendant] had not paid the monetary judgment. Thus, the district court retained ancillary enforcement jurisdiction until satisfaction of the judgment.”

“Now, however, the antidumping litigation has culminated¼therefore, the judgment now is rendered, paid, and satisfied. No pending litigation, other than this appeal, remains in the United States courts. Thus, the request for injunctive relief is not for the prevention of interdictory jurisdiction by Japanese courts. Instead, the United States courts are being asked to prevent [Defendant] from seeking a remedy available solely in Japan. Neither the All Writs Act nor the court’s ancillary enforcement jurisdiction provides the district court with a separate source of jurisdiction to enjoin [Defendant] under these circumstances.” [Slip op. 11].

The Court found no threat to their jurisdiction, reasoning that, “in cases involving parallel litigation in foreign countries, once one court reaches a final judgment, the role of comity for antisuit injunction purposes essentially is moot because there is no longer tension with the foreign country over concurrent jurisdiction. Instead, the doctrine of res judicata should apply as a defense to further litigation of the same issues.”

“The issues previously decided below in the district court are different from the issues sought to be litigated in the foreign jurisdiction. [Defendant] now seeks to litigate in Japan a cause of action solely available in Japan and not previously litigated in the antidumping litigation. The issues are not the same simply because [Defendant] cause of action under the Special Measures Law rests on the imposition of an adverse judgment against [Defendant] under the 1916 Act.”

The Court did not find sufficient evidence in the legislative history to justify the antisuit injunction stating, “we disagree with the district court’s assertion that Congress’s decision to repeal the 1916 Act prospectively, rather than retroactively, may play a role in the decision to

grant a foreign antisuit injunction to protect the court’s jurisdiction or an important United States policy.” [Slip op. 12].

“Our consideration of international comity must allow the Japanese courts, in the first instance, to determine the enforceability of the Special Measures Law, which will undoubtedly involve application of Japanese precedent and domestic policy, and the Japanese courts’ own consideration of international comity¼ [I]nternational comity requires us to give deference

to the Japanese courts to interpret Japanese laws.”

The Court declined to extend its jurisdiction on U.S. policy grounds reasoning that, “we are profoundly aware a judgment in favor of [Defendant] under the Special Measures Law would effectively nullify the remedy [Plaintiff] legitimately procured in the United States courts. Although such a result understandably is objectionable to [Plaintiff] it does not threaten United States jurisdiction or any current United States policy.” [Slip op. 13].

“Although the Special Measures Law, like other clawback or blocking provisions, can be regarded as an affront to the laws and judicial rules of the United States¼ the United States Executive and Legislative Branches, not the Judiciary, are the governmental bodies to address those diplomatic tensions.” [Slip op. 14].

Citation: Goss International Corp. v. Man Roland Druckmaschinen Aktiengesellschaft, 2007 WL 1731573 (8th Cir. 2007).

ARBITRATION

Eleventh Circuit holds that arbitration agreement in collective bargaining contract for seamen is enforceable under Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which supersedes relevant portions of the Seaman’s Wage Act

His employer, Celebrity Cruises, Inc. (Defendant) required Ignacio Eufemio Lobo (Plaintiff), a stateroom attendant on a passenger ship, to share his gratuities with his assistant by paying the assistant $1.20 per passenger per day from his own earnings. Plaintiff alleges that Defendant imposed this requirement through duress as a result of the unequal bargaining position of the parties. This requirement breaches the collective bargaining agreement governing the terms of his employment, which include gratuities as part of a stateroom attendant’s pay.

Plaintiff filed suit in federal district court. The Defendant moved to dismiss on the grounds that, pursuant to the same collective bargaining agreement, his wage claim must be sent to arbitration. Plaintiff responded that the arbitration clause in the collective bargaining agreement was invalid because it conflicted with both the Seaman’s Wage Act which gives seamen the right to access federal courts to resolve wage disputes, 46 U.S.C. Section 10313, and the Supreme Court’s decision in U.S. Bulk Carriers, Inc. v. Arguelles, 400 U.S. 351 (1971). The district court dismissed the complaint ruling that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention) 9 U.S.C. Sections 202‑208 the Seaman’s Wage Act and Arguelles had been superseded by. Plaintiff appealed to the U.S. Court of Appeals for the Eleventh Circuit.

The Court affirms, holding that the Convention superseded the Seaman’s Wage Act and that Arguelles did not apply here.

“In Arguelles, the Court considered whether the provisions of the Seaman’s Wage Act were displaced by the subsequent enactment of the Labor Management Relations Act (LMRA), which ‘provides a federal remedy to enforce grievance and arbitration provisions of collective‑bargaining agreements’ in commercial industries. Supra, at 352. The Supreme Court held that the LMRA did not abrogate the Seaman’s Wage Act remedy.” [Slip op. 2].

In the Court’s view, “the underlying basis of the Supreme Court’s decision in Arguelles was the fact that there was nothing in the language or legislative history of the LMRA to indicate an intent to abrogate the statutory right to sue in federal court afforded by the Seaman’s Wage Act.” [Slip op. 3].

On the other hand, in discussing the Convention, the Court determined that “Congress explicitly agreed to ‘recognize an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen . . . between them in respect of a defined legal relationship, whether contractual or not, concerning a subject matter capable of settlement by arbitration.’ Convention, Article II(1). Indeed, the Convention compels federal courts to direct qualifying disputes to arbitration.” In light of this distinction the Court held that “to nullify the arbitration provision here would hinder the purpose of the Convention and subvert congressional intent.” [Slip op. 4].

Citation: Lobo v. Celebrity Cruises, Inc., 488 F.3d 891 (11th Cir. 2007).

COPYRIGHT

After Danish Plaintiff had created and copyrighted “Good Luck Troll” dolls, their sale without copyright notice invalidated Plaintiff’s registration until Uruguay Round Agreements Act restored Plaintiff’s copyright so that Defendant’s marketing of such dolls before URAA’s enactment did not make Defendant “reliance party” to whom URAA would have accorded one year to clear its inventory of infringing dolls

In the late 1950s, Thomas Dam, a Danish wood carver, created a troll doll with an oversized head, big grin, potbelly, and frizzy hair, calling it a “Good Luck Troll.” Dam began selling his doll in the United States in 1961. In 1962, Dam founded “Dam Things Establishment (DTE) ,” and listed it as the creator of the dolls on his U.S. copyright registration. As some dolls had been sold in the U.S. without the proper copyright notice, the copyright was invalidated in 1962 on the grounds that the dolls had entered the public domain. Many companies then began marketing the dolls in the U.S.

In 1963‑64, DTE licensed Uneeda Doll Co., Inc. (UDCI), Defendant’s predecessor, to distribute troll dolls. From time to time, UDCI sold a line of troll dolls under the name “Wish‑Niks” between 1965 and 1984, and, according to UDCI’s chairman, probably as late as 1996. In that year, UDCI sold all of its assets, including its copyrights and other intellectual property rights, to Uneeda (Defendant).

After Thomas Dam died in 1989, his heirs granted Troll Co. (Plaintiff), a Danish company, the exclusive right to exploit and license the dolls. The Copyright Act, 17 U.S.C. Section 104A, enacted as part of the Uruguay Round Agreements Act (URAA), Pub. L. No. 103‑465, 108 Stat. 4809 (1994), restored the Good Luck Troll copyright on January 1, 1996. After Plaintiff had obtained a registration certificate in 2000, it set about enforcing its restored copyright.

In August 2005, Plaintiff was getting ready for a major re‑launch of its troll dolls, when it found out that Defendant was selling newly produced Wish‑niks to Wal‑Mart bearing copyright notices in Defendant’s name. After Plaintiff informed Wal‑Mart that the dolls infringed Plaintiff’s copyright, Wal‑Mart withdrew the dolls.

After bringing this copyright infringement action against Defendant in a New York federal court on October 7, 2005, Plaintiff obtained a preliminary injunction enjoining Defendant from manufacturing, distributing, or selling Wish‑nik dolls pending resolution of the case. Defendant appealed the preliminary injunction based on its contention that Plaintiff is unlikely to succeed on the merits of its infringement claim.

On appeal, Defendant made two supporting arguments. The first was that Plaintiff has not shown that it owns the restored copyright. The second was that Defendant qualifies as a “reliance party” within the meaning of Section 104A of the Copyright Act. This entitled it to sell off its inventory of Wish‑niks for one year following Plaintiff’s service of a notice of intent to enforce the restored copyright. The U. S. Court of Appeals for the Second Circuit, however, affirms.

The Court rejects Defendant’s first argument, finding that, under the URAA, Plaintiff would likely be able to establish ownership of the restored copyright. “First, Uneeda points out, the original 1965 registration certificate listed [DTE] not Dam himself, as the ‘author’ of the Good Luck Trolls. Consequently, Uneeda argues, [Plaintiff] must establish a chain of ownership from [DTE] but not from Dam through his heirs, as [Plaintiff] argued in the District Court.”

“But the URAA specifies that authorship is to be determined by reference to the source country’s law, not by reference to U.S. copyright registration. See 17 U.S. C. Section 104A(b); see, e.g., Alameda Films S A v. Authors Rights Restoration Corp., 331 F.3d 472, 477 (5th Cir. 2003) (applying Mexican law). Neither party submitted evidence of Danish law to the District Court [Editorial Note: see Fed. R. Civ. Proc . 44.1.]

In any event, to obtain a preliminary injunction, [Plaintiff] needed to show only that it was likely to prove ownership, and it seems likely that Danish law would consider Dam to be the ‘author’ of the troll dolls since he created the dolls several years before he established [DTE].” [155].

After pointing out that the URAA restored copyrights as of January 1, 1996, the Court lays out the relevant categories of reliance parties. “Much of 17 U.S.C. Section 104A concerns the enforcement of restored copyrights against parties that were legitimately exploiting works in reliance on their public domain status. The statute creates a category of prior exploiters called ‘reliance parties,’ who may continue to exploit the work until the owner of the restored copyright makes known its intent to enforce its copyright. The Second Circuit then determines that the court below had incorrectly determined the date on which Denmark became an eligible country, and hence whether Defendant was a reliance party by having acted prior to that date.

“Thus, subsections (A) and (B) make the status of a reliance party turn on whether a person took certain actions with respect to a work prior to the date that the source country of that work became an eligible country. And, for purposes of subsections (A) and (B), a source country that was a member of the Berne Convention for the Protection of Literary and Artistic Works of 1886 [as revised and amended, in effect for U. S., March 1, 1989, Sen. Treaty Doc. No. 99‑27] when the URAA was enacted (as well as Danish legislation) Denmark became an eligible country on the date of the URAA’s enactment, December 8, 1994. See id. Section 104A(h)(3)(B) [Cites].”

“The District Court mistakenly looked to the date of copyright restoration, January 1, 1996, rather than the date of the URAA’s enactment, to determine the date when Denmark became an eligible country and hence whether [Defendant] or its predecessor was a reliance party by reason of having acted with respect to the troll dolls prior to that date. [Cite]” [157]

Finding the text of Section 104(h)(4)(A) ambiguous as to its use of “continues,” the court looks to the legislative history. “The legislative history of Section 104A suggests that Congress understood Section 412 to mean that a post‑registration act of infringement will not be deemed to have commenced before registration if the infringing activity ceased for an appreciable period of time. In such a case, the copyright owner could recover statutory damages and attorney’s fees for that new, post‑registration act of infringement.”

“By using the word ‘continues,’ Congress must have intended to incorporate this same principle into Section 104A (h)(4)(A). We therefore construe this subsection ... to confer reliance party status only on persons whose infringement is ongoing and without more than trivial interruption. This limitation is consistent with the purpose of the URAA’s reliance provisions.” “A party that has invested time and resources into ongoing exploitation of a work in reliance on the work’s public domain status would incur substantial harm from the sudden inability to engage in that business; the URAA therefore requires owners of restored copyrights to notify such parties of their intent to enforce and gives those parties a year after notification to sell off their inventories.”

“By contrast, a party that has voluntarily ceased exploitation for a non‑trivial period of time, here, nine or ten years – even where such exploitation was episodic due to the cyclical nature of consumers’ interest in the product – has a less substantial interest in being able to resume that exploitation after restoration.” [158‑59].

Applying this standard to Defendant, the court concludes that, although Defendant’s predecessor UDCI may have initially been a reliance party, Defendant’s nine or ten‑year hiatus precluded Defendant from claiming that status. “... [W]e first observe that [Defendant] initially may have been a reliance party under Section 104A(h)(4)(A) following the URAA’s enactment. According to the evidence before the District Court, [Defendant] ‘sold Wish‑nik dolls beginning in 1992 and continuing into the mid‑1990s, at least through 1994 and probably up to 1996.’ Because the District Court mistakenly deemed reliance party status to turn on the date of restoration, January 1, 1996, it concluded that [Defendant] could not have been a reliance party.”

“However, ... the critical date for assessing reliance party status is December 8, 1994. If the District Court were to credit [Defendant’s] evidence and find that [Defendant] sold Wish‑niks in 1995, [Defendant] would have been a reliance party under Section 104A (h)(4)(A) because it would have continued to engage in infringing acts after December 8, 1994.”

“Notwithstanding this observation, we need not remand the case for reexamination of [Defendant’s’ claim to reliance party status. Even if we assume that [Defendant] was a reliance party for some period of time, UDCI and [Defendant ]as its successor, would have retained that status only to the extent that they continued to engage in such infringing acts. For the reasons set forth above, [Defendant’s] renewed manufacture and sale of Wish‑niks after a nine‑ or ten‑year hiatus is not a continuation of infringement under Section 104A (h)(4)(A). Accordingly, [Defendant] cannot claim protection as a reliance party under this provision.” [159‑60].

The Court also rejects Defendant’s reliance‑party claim under Section 104 (h)(4)(B), construing the statutory language so as to avoid results that would be not only absurd but also incompatible with the URAA’s goals. “The text of Section 104A(h)(4)(B) is ambiguous on this point, and there is no legislative history clarifying Congress’s intent. However, it is an elemental principle of statutory construction that an ambiguous statute must be construed to avoid absurd results. [Cite].”

“[Defendant’s] proposed interpretation would render the statute absurdly broad: any entity that purchased even one Wish‑nik doll many years ago while the troll dolls were in the public domain could decide to begin manufacturing troll dolls after the restoration of the copyright and thereby become a reliance party. Conferring reliance party status on such entities would be incompatible with the URAA’s dual goals of restoring copyright protection and safeguarding legitimate reliance interests. ... [W]e conclude that Congress intended to limit the benefit of reliance party status under Section 104A (h)(4)(B) only to those copies made or acquired before the URAA’s enactment.”

“Because [Defendant] intends to sell recently manufactured Wish‑niks and does not claim to be disposing of Wish‑niks made by [Defendant] before the URAA’s enactment, it is not entitled to reliance party status as UDC’s successor under Sections 104A(h)(4)(B)‑( c).”

Citation: Troll Co. v. Uneeda Doll Co., 483 F.3d 150 (2nd Cir. 2007).

FORUM SELECTION

In case of an employment agreement between a Honduran seaman and a U.S. Corporation, Fifth Circuit declines to nullify a forum selection clause, giving jurisdiction to Honduran courts

Global International Marine (Defendant) hired Honduran native Dilbert Ivan Calix‑Chacon (Plaintiff) to work as a seaman on one of its ships. Plaintiff, who speaks limited English, signed an employment contract, which was written in English that contained a choice of law clause providing that Honduran law would apply to the employment agreement. The agreement also contained a forum selection clause, limiting jurisdiction for claims arising out of the employment agreement or for injury to be brought exclusively in a court of competent jurisdiction in Honduras.

Plaintiff worked on a U.S. flagged vessel that was in dry dock in Louisiana undergoing routine maintenance and inspections. Plaintiff experienced severe stomach pain while doing maintenance aboard ship. He was taken to the hospital in Houma, Louisiana, were he was diagnosed with an inflamed gall bladder and his gall bladder was removed. After the surgery doctors determined that plaintiff had an enlarged heart, and recommended an immediate heart transplant.

Defendant agreed to pay for the gall bladder surgery, but refused to pay for the heart transplant. Plaintiff filed suite in federal district court. The district court held the forum selection clause unenforceable and held an expedited trial on the merits. The court ordered defendant to pay for all necessary past and future care as recommended by plaintiff’s doctors. Defendant appealed.

The U.S. Court of Appeals for the Fifth Circuit vacates and remands further proceedings to determine whether the forum selection clause is enforceable under the guidelines established in Bremen and its progeny. The issue on appeal is whether this is an exceptional case where the forum selection clause in the seaman’s employment contract should be considered so unfair and unreasonable as to be unenforceable.

“The case which is most factually analogous to today’s case is a decision by this court in Marinechance Shipping, Ltd. v. Sebastian, 143 F.3d 216 (5th Cir. 1998). In that case, we applied the Bremen/Shute analysis to a forum selection clause included in a seaman’s employment contract¼ The seamen were employed under a contract approved by the Philippine Overseas Employment Administration. The contract required that “any disputes ... shall be referred for settlement solely to the exclusive jurisdiction of the competent Courts or Authorities, as the case may be, in the country of the seaman’s nationality where the contract of employment was signed” [Slip op. 5].

In that case, the Fifth Circuit held that the contracts of employment for seamen aboard international vessels are routine. The seamen individually do not have much bargaining power, and a forum selection clause reduces the vessel owner’s exposure to lawsuits anywhere in the world.

“The Shipowners’ Liability Convention of 1936 (the “Convention”) is an international treaty ratified by the United States Senate in 1938. Article 2 of the Convention declares that ‘[t]he shipowner shall be liable in respect of (a) sickness and injury occurring between the date specified in the articles of agreement for reporting for duty and the termination of the

engagement.’ Article 1(1) of the Convention declares that it applies to all persons employed on board any vessel, other than a ship of war, registered in a territory for which this Convention is in force and ordinarily engaged in maritime navigation.” [Slip op. 7]

“The Supreme Court, however, has made it clear that the Convention restates the rule as it exists under the General Maritime Law. By signing on to the Convention there was no intent to change existing law. Rather, [t]he aim of the Convention ‘was not to change materially American standards but to equalize operating costs by raising the standards of member nations to the

American level.’ Warren v. United States, 340 U.S. 523, 527 (1951).” [Slip op. 7]

“This policy statement regarding the shipowner’s duty to furnish injured seaman maintenance and cure did not bar this court from deciding in Marinechance that a forum selection clause is valid and enforceable against all of the claims raised by the injured seamen.” [Slip op. 7]

“The district court has in effect held that the Convention prohibits a federal district court from refusing to entertain maintenance and cure claims brought by foreign seamen in a United States court. Based on our decision in Marinechance, that is clearly not the law.” [Slip op. 8]

“Thus we conclude that the district court erred in relying on the Convention as representing a strong public policy in favor of the maintenance and cure remedy that renders a forum selection clause unenforceable.” [Slip op. 8].

“On remand the district court should make factual findings so it can apply the Bremen factors and determine whether ‘(1) the incorporation of the forum selection clause into the agreement was the product of fraud or overreaching; (2) [Plaintiff] ‘will for all practical purposes be deprived of his day in court’ because of the grave inconvenience or unfairness of the selected forum; (3) the fundamental unfairness of the chosen law will deprive [him] of a remedy; or (4) enforcement of the forum selection clause would contravene a strong public policy of the forum state.’” [Quoting Haynesworth v. Corporation, 121 F.3d at 963 (5th Cir. 1997)]. [Slip op. 8].

In discussing the third factor, the Circuit Court reasons that the district court should make factual findings on the issues presented by the parties related to whether plaintiff will for all practical purposes be deprived of his day in court or be deprived of a remedy if the court enforces the forum selection clause. However, applying the facts to the Bremen exceptions does not mean that Plaintiff is entitled to medical care that would be standard care in the U.S.

“Concerning [Plaintiff’s] physical limitations, Carnival Cruise Lines v. Shute did not accept the Court of Appeal’s justification that a choice of forum clause should not be enforced because the plaintiffs are physically and financially incapable of pursuing litigation in the forum chosen in the choice of forum clause when the district court made no factual findings on the issue. 499 U.S. 585, 594 (191). And as the Second Circuit has held, with modern conveniences of electronic filing and videoconferencing, “[a] plaintiff may have his ‘day in court’ without ever setting foot in a courtroom.” Effron v. Sun Line Cruises, Inc., 67 F.3d 7, 11 (2d Cir. 1995).

Thus, a conclusion that [Plaintiff’s] legal remedy must be pursued in Honduras does not necessarily mean that he physically must travel to that jurisdiction.” [Slip op. 9].

The Fifth Circuit thus vacates the district courts ruling and remanded the case to the district court for further proceedings consistent with the opinion.

Citation: Calix‑Chacon v. Global International Marine, Inc., No. 06‑30686 (5th Cir. July 19, 2007).

SOVEREIGN IMMUNITY

U. S. Supreme Court rules that FSIA does not immunize foreign government from lawsuit to declare validity of New York city tax liens on property held by that sovereign to house its lower‑level employees and their families

New York law exempts from taxation all real property owned by a foreign government when that state is using it solely for diplomatic offices or quarters for ambassadors or ministers plenipotentiary to the United Nations. For many years, Respondent (New York City) has levied property taxes against Petitioners (the governments of India and Mongolia) for those parts of their diplomatic office buildings used to house lower level employees and their families.

The Permanent Mission of India to the United Nations occupies a 26‑floor building in New York City that the Government of India owns. The Mission uses several floors for diplomatic offices, but about 20 floors contain residential units for employees of the diplomatic mission and their families. The employees – all of whom are below the rank of Head of Mission or Ambassador – are Indian citizens who receive housing from the Mission rent free.

Likewise, the Ministry for Foreign Affairs of the People’s Republic of Mongolia occupies a six‑story building in New York City, which the Mongolian Government owns. Certain floors of the Ministry Building include residences for lower level employees of the Ministry and their families. Petitioners have consistently declined to pay the taxes.

By operation of state law, the unpaid taxes eventually transmogrified into tax liens held by the Respondent against the residential properties. As of February 1, 2003, the Indian Mission owed about $16.4 million in unpaid property taxes and interest, while the Mongolian Ministry owed about $2.1 million. On April 2, 2003, Respondent filed suits in the New York state courts

seeking declaratory judgments to establish the validity of these tax liens; Petitioners removed the cases to federal court pursuant to 28 U.S.C. Section 1441(d), which provides for such removal by a foreign state or its instrumentality. There they contended that they were immune under the Foreign Sovereign Immunities Act of 1976 (FSIA), which is the sole basis for obtaining jurisdiction over a foreign state in federal court. Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 439.

The District Court disagreed, however, relying on an FSIA exception to a foreign state’s immunity from federal jurisdiction where “rights in immovable property situated in the United States are in issue.” 28 U.S. C. Section 1605(a)(4). Reviewing the District Court’s interlocutory decision under the “collateral order” doctrine, a unanimous panel of the Second Circuit affirmed. It held that the “immovable property” exception applied, and thus stripping the Petitioners’ of their general immunity from District Court jurisdiction over the Respondent’s civil actions. The U. S. Supreme Court granted certiorari on the following question: whether the FSIA immunizes a foreign government from a lawsuit to declare the validity of tax liens on property held by that sovereign to house its lower‑level employees and their families. In a 7 to 2 vote, the Supreme Court answers in the negative.

Under the FSIA, a foreign state is presumptively immune from suit unless a specific statutory exception applies. In assessing the scope of the immovable property exception, the Court begins with the text of the statute. Contrary to Petitioners’ claim, Section 1605(a)(4) does not expressly limit itself to cases in which the specific right at issue is title, ownership, or possession; nor does it specifically rule out cases where the validity of a lien is at stake. On the contrary, it focuses more broadly on “rights in” property.

At the time of the FSIA’s adoption, Black’s Law Dictionary at 1072 (1) defined “lien” as a “charge or security or incumbrance upon property,”, and (2) “incumbrance” as “[a]ny right to, or interest in, land which may subsist in another to the diminution of its value,” id., at 908. New York law’s definition of “tax lien” accords with these general definitions. The practical effects of a lien support the treatment of liens as interests in property. Since a lien on real property “runs with the land” and is enforceable against later buyers, a tax lien inhibits a quintessential property ownership right – the right to convey. Thus, a suit to establish the validity of a tax lien linguistically involves “rights in immovable property.”

Two well‑recognized and related purposes of the FSIA substantiate the majority’s reading of the text: (1) the modern adoption of the restrictive view of sovereign immunity and (2) the codification of international law at the time of the FSIA’s enactment.

“Until the middle of the last century, the United States followed ‘the classical or virtually absolute theory of sovereign immunity,’ under which ‘a sovereign cannot, without his consent, be made a respondent in the courts of another sovereign.’ Letter from Jack B. Tate, Acting Legal Adviser, U.S. Dept. of State, to Acting U.S. Attorney General Phillip B. Perlman (May 19, 1952) (Tate Letter), reprinted in 26 Dept. of State Bull. 984 (1952), and in Alfred Dunhill of London, Inc. v. Republic of Cuba, 425 U.S. 682, 711 (1976) (App. 2 to opinion of the Court). The Tate Letter announced the United States’ decision to join the majority of other countries by adopting the ‘restrictive theory’ of sovereign immunity, under which ‘the immunity of the sovereign is recognized with regard to sovereign or public acts (jure imperii) of a state, but not with respect to private acts (jure gestionis).’ Id.”

“In enacting the FSIA, Congress intended to codify the restrictive theory’s limitation of immunity to sovereign acts. Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 612 (1992); Asociacion de Reclamantes v. United Mexican States, 735 F.2d 1517, 1520, (1984) (Scalia, J.).”

“As a threshold matter, property ownership is not an inherently sovereign function. See Schooner Exchange v. McFaddon, 7 Cranch 116, 145 (1812) (‘A prince, by acquiring private property in a foreign country, may possibly be considered as subjecting that property to the territorial jurisdiction, he may be considered as so far laying down the prince, and assuming the character of a private individual’). In addition, the FSIA was also meant ‘to codify ... the pre‑existing real property exception to sovereign immunity recognized by international practice.’ Reclamantes, supra, at 1521 (Scalia, J.).”

“Therefore, it is useful to note that international practice at the time of the FSIA’s enactment also supports the City’s view that these sovereigns are not immune. The most recent restatement of foreign relations law at the time of the FSIA’s enactment states that a foreign sovereign’s immunity does not extend to ‘an action to obtain possession of or establish a property interest in immovable property located in the territory of the state exercising jurisdiction.’ Restatement (Second) of Foreign Relations Law of the United States Section 68(b), p. 205 (1965). As stated above, because an action seeking the declaration of the validity of a tax lien on property is a suit to establish an interest in such property, such an action would be allowed under this rule.” [2356‑57].

Citation: Permanent Mission of India to the United Nations v. City of New York, 127 S. Ct. 2352, 75 U.S. L. W. 4433 (Sup. Ct. June 14, 2007).

SOVEREIGN IMMUNITY

District of Columbia Circuit holds that accounts frozen by Central Bank Ethiopia are not “owned or operated” by Ethiopia and therefore not subject to jurisdiction under Expropriations Exception of the FSIA

In May 1998, an armed conflict broke out on the border between Eritrea and Ethiopia. Approximately one month later, Ethiopia expelled a large number of Eritreans that were living in the country. Plaintiffs, who were among those expelled, claim that Ethiopia also seized their bank accounts and other property. Specifically, they allege that Ethiopia had their accounts in the Central Bank of Ethiopia (CBE) frozen and that CBE prevented any access to, or withdrawal of, their funds. It also retained the funds from these accounts or¼exchanged them for other assets. On December 12, 2000, Ethiopia and Eritrea signed a Peace Agreement. It provided for a Claims Commission to adjudicate claims arising out of the conflict and resulting from a violation of international law. The D.C. Circuit Court had held, at an earlier date, that “the Commission’s inability to make an award directly to the Plaintiffs, and Eritrea’s ability to set off the Plaintiffs’ claim[s], against claims made by ... Ethiopia, show that the Commission is an inadequate forum. See Nemariam v. Fed. Democratic Republic of Ethiopia, 315 F.3d 390, 395 (D.C. Cir. 2003).

Plaintiffs sued Ethiopia and CBE (Defendants) in federal district court. The district court dismissed for lack of subject matter jurisdiction. When Plaintiffs appealed, the District of Columbia Circuit affirms.

“The [Plaintiffs] seek to establish jurisdiction pursuant to 28 U.S.C. Section 1605(a)(3) – FSIAs so‑called ‘expropriation exception’ – alleging that Ethiopia and the CBE illegally expropriated their bank accounts (bank account claims) and other property (non‑bank account claims).” [Slip op. 4].

As to the bank accounts, the Court held that CBE did not own or operate the bank accounts within the meaning of Section 1605(a)(3). This exception to sovereign immunity applies when “(a) the property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state or (b) the property is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States.

In the Court’s view, the bank accounts constituted property within the meaning of Section 1605(a)(3). It reasoned that: “Neither the plain language of Section 1605(a)(3) nor its legislative history expressly states that the expropriation exception applies only to tangible property. Moreover, ‘the tangible/intangible characterization of property interests . . . is a distinction without a difference’ and ‘is not generally recognized in international, federal, or state law.’ West v. Multibanco Comermex S.A., 807 F.2d 820, 830 (9th Cir. 1987).” [Slip op. 7].

The district court had held that Defendants did not own and operate the bank accounts. This followed the reasoning of the Fifth Circuit that “the ‘owned and operated’ language of Section 1605(a)(3) requires a showing that the property benefited the government which allegedly expropriated it¼ [I]n so holding, it relied on the only two reported decisions addressing the issue – Vencedora Oceanica Navigacion, S. A. v. Compagnie Nationale Algerienne de Navigation, 730 F.2d 195 (5th Cir. 1984), and Greenpeace, Inc. v. State of France, 946 F. Supp. 773 ( c). D. Cal. 1996).” [Slip op. 9].

The present Court, however, views this reasoning as unpersuasive. It held that “the Vencedora holding runs contrary to the language and legislative history of Section 1605(a)(3). The phrase ‘owned or operated’ plainly does not include a benefit requirement. To ‘own’ is to ‘have or hold as property or appurtenance . . . [possess],’ see Webster’s Third New International Dictionary 1612 (3d ed. 1993), and to ‘operate’ is to ‘exert power or influence, id. at 1580.” [Slip op. 10].

The Court upheld the lower court’s ruling on different grounds. “[T]he property right at issue¼is the [Plaintiff’s] contractual right to receive payment and the CBE has neither taken possession of nor exerted control over that right¼ we believe the CBE has extinguished that contract right. [T]he CBE did not assume the [Plaintiffs’] contractual right to performance – instead it declined to perform its own contractual obligations.”

“Because the [Plaintiffs] have failed to satisfy the ‘owned or operated’ requirement of Section 1605(a)(3) with respect to their bank account claims, Ethiopia and the CBE are immune from suit on those claims. See 28 U.S.C. Section 1330.” [Slip op. 11]

Citation: Nemariam v. Federal Democratic Republic of Ethiopia, 2007 WL 1791098 (D.C. Cir. 2007).

TERRORISM

In suit complaining of NSA’s program of intercepting overseas communications with suspected al Qaeda members and affiliates, Sixth Circuit finds that Plaintiffs who communicated with Members of suspect class do not have standing to bring lawsuit

After the September 11, 2001, terrorist attacks, the National Security Agency (NSA) began a counter‑terrorism program known as the Terrorist Surveillance Program (TSP). President Bush authorized the TSP and the specifics remain undisclosed. The NSA, however, has publicly admitted certain aspects of the program. The TSP involves the warrant less interception by wiretapping of telephone and e‑mail communications where one party to the communication is located outside the United States and the NSA has a reasonable basis to conclude that one party to the communication is a member of al Qaeda, affiliated with al Qaeda, a member of an organization affiliated with, or working in support of, al Qaeda.

The Plaintiffs in this federal action include the ACLU on behalf of journalists, academics, and lawyers who regularly communicate with individuals located overseas, who the Plaintiffs believe are the types of people the NSA suspects of being al Qaeda terrorists, affiliates, or supporters, and likely to have the TSP monitor them. The allege violations of the First and Fourth Amendments, the Separation of Powers Doctrine, the Administrative Procedures Act (APA), Title III of the Omnibus Crime Control and Safe Streets Act (Title III), and the Foreign Intelligence Surveillance Act (FISA).

The district court found the TSP unconstitutional and enjoined its operation. The NSA appealed. The U.S. Court of Appeals for the Sixth Circuit remands with instructions to dismiss the action for lack of standing. The Court first addresses the Constitutional claims under the requirements of the constitutional minimum for standing: injury in fact, causation, and redressability. Addressing the First Amendment claim, the court found that there was no injury in fact deciding that, “the Plaintiffs here do not assert that they personally anticipate or fear any direct reprisal by the United States government, or that the TSP data is being widely circulated or misused. Indeed, the district court stated that, to date, no one has been exposed or prosecuted based on information collected under the TSP.” [Slip op. 15]

Likewise the Court finds no causation. “[I]t is possible that the overseas contacts’ refusal to communicate with the Plaintiffs has no relation to the putatively illegal government action of wiretapping without FISA compliance.” [Slip op. 23]. Finally, the Court concludes that redressability was lacking; it reasoned that, “the Plaintiffs’ self‑imposed burden on communications would survive the issuance of FISA warrants.” [Slip op. 26]

The Court also rejects the Plaintiffs’ Fourth Amendment claim. “Fourth Amendment rights are ‘personal rights’ which, unlike First Amendment rights, may not be asserted vicariously. The Plaintiffs do not, and cannot, assert that any of their own communications have ever been intercepted.” [Slip op. 27]

The Court also declined to grant relief on the Separation of Powers claim. “It would ill behoove us to exceed our authority in order to condemn the President or Congress for exceeding theirs.”The Court then addressed the statutory claims, analyzing standing under both the constitutional minimum and prudential principles. “The prudential standing doctrine embodies “judicially self‑imposed limits on the exercise of federal jurisdiction.” [Slip op. 31]

The Court concludes that the Plaintiffs lacked standing under the APA. The TSP did not constitute “agency action” under the meaning of the APA, arguing that, “the [Plaintiffs] do not complain of any NSA rule or order, but merely the generalized practice, which – so far as has been admitted or disclosed – was not formally enacted pursuant to the strictures of the APA, but merely authorized by the President (albeit repeatedly, and possibly informally).

Nor do the [Plaintiffs] challenge any license, sanction, or relief issued by the NSA.” [Slip op. 32‑33]. Nor is there standing under Title III, which regulates the government’s interception of electronic communications. Title III does not provide a cause of action because it does not apply to internationally focused surveillance activities. According to the Court, “The first clause of Section 2511(2)(f) ... expressly disclaims application of Title III to surveillance activities of the type at issue in the present case.” [Slip op. 34].

In addressing FISA, the Court reasons that NSA’s conduct satisfies the statutory requirement as having to do with “foreign intelligence information, which includes ‘information that relates to ... the ability of the United States to protect against ... international terrorism. 50 U.S.C. Section 1801(e)(1)(B).’” [Slip op. 36].

The Court further notes that there is not enough evidence that the TSP constitutes “electronic surveillance” as the statute defines it. The Court reasons that “electronic surveillance has a very particular, detailed meaning under FISA—a legal definition that requires careful consideration of numerous factors sch as the types of communications acquired, the location of the parties to the acquired communications, the location where the acquisition occurred, the location of any surveillance device, and the reasonableness of the parties’ expectation of privacy¼ The Plaintiffs have not shown, and cannot show, that the NSA’s surveillance activities include the sort of conduct that would satisfy FISA’s definition of electronic surveillance.” [Slip op. 36].

Finally, the Court holds that none of the Plaintiffs is an “aggrieved person” as defined by the statute, nor does the statute provide for the injunctive relief that the Plaintiffs seek.

Citation: American Civil Liberties Union v. National Security Agency, 2007 WL 1952370 (6th Cir. 2007).

TORTS (ECONOMIC)

In tort action by English celebrity magazine who had contracted for exclusive rights to photographs of private New York wedding between Michael Douglas and Catherine Zeta‑Jones against similar magazine who bought unauthorized freelancer’s surreptitious photos of same wedding, House of Lords, by 3 to 2 vote, upheld substantial damage award given by Queens Bench

By leave of three members of the House of Lords granted on July 28, 2005, the third Plaintiff, Northern & Shell plc (NAS), publishers of “OK!” magazine, appealed from an adverse decision of the Court of Appeal, Civil Division. It allowed an appeal by the first Defendant, “Hello! Ltd.”(HL) holding HL liable in damages to NAS for breach of confidence and assessing the damages at £1,026,706 for loss of profits caused by the Defendant’s exploitation of unauthorized photographs of the November 18, 2000 private New York wedding between Mr. Michael Douglas and Miss Catherine Zeta‑Jones (the Douglases) well‑known film actors. (The Douglases are not parties to the present appeal.)

The Douglases had agreed with NAS, the publisher of an English celebrity magazine, “OK!” (third Plaintiff), to grant it exclusive rights for a period of nine months to publish those wedding photographs approved by the Douglases. The magazine paid the Douglases £1m. The contract further provided that the Douglases retained any rights not expressly granted to NAS. The Douglases hired an official photographer, and jointly owned any copyright in the photographs taken. The Douglases agreed that they would take all reasonable security steps to restrict unauthorized access to the wedding so that third party media would be unable to take, obtain or to timely market their wedding photographs. The couple told all guests not to take any photographs and set up tight security measures. Nevertheless, a freelance photographer named Rupert Thorpe (presumably by passing himself off as a waiter or guest ) infiltrated the

wedding reception and covertly took photographs.

Thorpe then sold the exclusive right to publish the unauthorized photographs to the first Defendant, the English publisher of “Hello!” a celebrity magazine in competition with NAS. When the Douglases and NAS found out that the first Defendant intended to publish unauthorized photographs, they obtained an ex parte interlocutory injunction from an English court on November 20, 2000 that restrained publication of the photos. The Court of Appeal, however, lifted the order three days later.

“Hello!” began to sell copies of its issue containing the unauthorized photographs the next day. The third Plaintiff put out two issues of its own publication thus incurring expenses. The Plaintiffs sued for damages as a result of the first Defendant’s unauthorized publication and joined further Defendants. The judge held, inter alia, that the third Plaintiff was entitled to damages from the first Defendant for the loss of profits from the exploitation of the authorized photographs attributable to the publication of the unauthorized photographs. On the other hand, it rejected the third Plaintiff’s claim against the first Defendant based on the economic torts of deliberate interference with the third Plaintiff’s business or conspiracy to injure by lawful or unlawful means. The Court therefore decided that “Hello!” was liable to “OK!” for the loss caused by its publication, which he later assessed at £ 1, 033, 156.

The Court of Appeal, Civil Division, allowed the first Defendant’s appeal. It ruled that the third Plaintiff had no right to commercial confidence enforceable against the first Defendant in relation to the details of the wedding or the photographic images portraying them. The Court of Appeal reversed the judge’s decision on the ground that the obligation of confidence for the benefit of “OK!” attached only to the photographs, which the Douglases had authorized them to publish. They did not have the benefit of an obligation of confidence as to any other photographs. Three of the five Lords of Appeal conclude that the Queens Bench judge was right.

“The point of which one should never lose sight is that “OK!” had paid £1m for the benefit of the obligation of confidence imposed upon all those present at the wedding in respect of any photographs of the wedding. That was quite clear. Unless there is some conceptual or policy reason why they should not have the benefit of that obligation, I cannot see why they were not entitled to enforce it. And in my opinion there are no such reasons. Provided that one keeps one’s eye firmly on the money and why it was paid, the case is ... quite straightforward.”

“It is first necessary to avoid being distracted by the concepts of privacy and personal information. In recent years, English law has adapted the action for breach of confidence to provide a remedy for the unauthorized disclosure of personal information. [Cite]. This development has been mediated by the analogy of the right to privacy conferred by Article 8 of the European Convention on Human Rights and has required a balancing of that right against the right to freedom of expression conferred by Article 10.”

“But this appeal is not concerned with the protection of privacy. Whatever may have been the position of the Douglases, who, ... recovered damages for an invasion of their privacy, “OK!’s” claim is to protect commercially confidential information and nothing more. So your Lordships need not be concerned with Convention rights. “OK!” has no claim to privacy under Article 8 nor can it make a claim which is parasitic upon the Douglases’ right to privacy.”

“The fact that the information happens to have been about the personal life of the Douglases is irrelevant. It could have been information about anything that a newspaper was willing to pay for. What matters is that the Douglases, by the way they arranged their wedding, were in a position to impose an obligation of confidence. They were in control of the information.”

“Is there any conceptual problem about the fact that the obligation of confidence was imposed only in respect of a particular form of information, namely, photographic images? I do not see why there should be. If “OK!” was willing to pay for the right to be the only source of that particular form of information and did not mind that others were free to communicate other forms of information about the wedding, then I think the Douglases should be able to impose a suitably limited obligation of confidence.”

“[Our noble and learned dissenters] are troubled by the fact that the information in the photographic images was not intended to be kept secret but to be published to the world by “OK!” and was so published at much the same time as the unauthorized photographs in “Hello!”. But I see no reason why there should not be an obligation of confidence for the purpose of enabling someone to be the only source of publication if that is something worth paying for.”

“Why should a newspaper not be entitled to impose confidentiality on its journalists, sub‑editors and so forth to whom it communicates information about some scoop which it intends to publish next day? That does not of course prevent publication by someone who receives the information otherwise than under an obligation of confidence. And I say nothing about cases in which there is a public interest in communicating the information to others or the public at large. But otherwise it is simply information of commercial value.”

“[One dissenter] is also of opinion that once the approved photographs were published, the publication of the unauthorized photographs was not a breach of confidence. I cannot understand this. [Thorpe] was subject to an obligation of confidence in respect of the pictures, which he took. “Hello!”, by reason of the circumstances in which they acquired the pictures, were subject to the same obligation. How could it be destroyed by “OK!’s” publication of other photographs a few hours earlier? He says that the differences between the photographs were ‘insufficiently significant to call for legal protection’; ‘the unapproved pictures contained nothing not included in the approved pictures’.”

“My Lords, it is certainly the case that once information gets into the public domain, it can no longer be the subject of confidence. Whatever the circumstances in which it was obtained, there is no point in the law providing protection. But whether this is the case or not depends on the nature of the information. Whether there is still a point in enforcing the obligation of confidence depends on the facts. If the purpose of publishing the pictures was simply to convey the information that the Douglases had married, the bride wore a wedding dress and so forth, then the publication of any photographs would have put that information in the public domain. So would a description of the event.”

“In this case, however, the point of the transaction was that each picture would be treated as a separate piece of information which “OK!” would have the exclusive right to publish. The pictures published by “OK!” were put into the public domain and it would have had to rely on the law of copyright, not the law of confidence, to prevent their reproduction. But no other pictures were in the public domain and they did not enter the public domain merely because they resembled other pictures, which had. Why was “Hello!” willing to pay [Thorpe] so much money for information, which was already in the public domain? Why did the judge find that the publication of information, which did not, in Lord Nicholls’s words, ‘call for legal protection’, had caused substantial financial loss to “OK!”? My Lords, this seems to me a point on which theory is in danger of losing touch with reality.”

“The Court of Appeal’s analysis, which treats the obligation of confidence as having been imposed in favor of “OK!” only in respect of the photographs with which it was supplied by the Douglases, also seems to me to make no commercial sense. The essential purpose of the security arrangements and the prohibition of unauthorized photography were to impose an obligation of confidence in respect of any pictures of the wedding. Only in that way could the commercial interests of “OK!” be protected. And it was clear to everyone, ... , that this obligation was imposed for the benefit of “OK!” as well as the Douglases.”

“Is there any reason of public policy why the law of confidence should not protect information of this form and subject matter? There is ... no question of creating an ‘image right’ or any other unorthodox form of intellectual property. The information in this case was capable of being protected, not because it concerned the Douglases’ image any more than because it concerned their private life, but simply because it was information of commercial value over which the Douglases had sufficient control to enable them to impose an obligation of confidence.”

“Some may view with distaste a world in which information about the events of a wedding, which Warren and Brandeis in their famous article on privacy ‘The Right to Privacy,” 4 Harvard L. Rev. 193 (1890) regarded as a paradigm private occasion, should be sold in the market in the same way as information about how to make a better mousetrap. But being a celebrity or publishing a celebrity magazine are lawful trades and I see no reason why they should be outlawed from such protection as the law of confidence may offer.”

“I therefore think that the Court of Appeal was wrong to reverse the judge on this point. [Counsel for] “Hello!”, also relied upon two other arguments. First, he said that to hold that participants in a ‘celebrity event’ can impose a duty of confidence upon those who attend would give rise to inconsistency with the ‘carefully constructed’ scheme of statutory performing rights in Part II of the Copyright, Designs and Patents Act 1988. I cannot see how there can be a conflict between such statutory rights and any additional rights, which may exist under the common law. One might as well say that the law of contract is inconsistent because it allows for the possibility of a performer bargaining for greater rights than he would have under the statute.”

“Secondly, [counsel] submitted that, under the law of New York, [Thorpe] owed no obligation to keep the information confidential. The Statement of Facts and Issues records that under New York law ‘there would have been no inhibition upon [Thorpe’s] publishing the photographs which he had taken’. We are not told the basis of this statement. The judge found that Mr. Thorpe must have been ‘at least a trespasser’ by the law of New York.”

“It may be that, under the First Amendment, he was entitled to publish in New York notwithstanding the circumstances in which the photographs were obtained. But that does not mean that he, or anyone deriving title from him, is entitled to publish in England. There is nothing to suggest that an obligation of confidence cannot be imposed in New York, even though it may be overridden by a constitutional right to freedom of expression. But the question of whether that obligation of confidence can entitle the beneficiary to restrain publication in England is a matter of English law.” “[Defendant’s Counsel] submitted that the award of damages should not be allowed in full because, on the evidence, a substantial part of the loss was caused by the publication of the unauthorized photographs in national daily newspapers rather than in “Hello!” But the judge considered this point in his supplemental judgment on damages ... and came to the conclusion that the full losses were ‘sufficiently consequential upon the breach and sufficiently foreseeable as to make ‘Hello!’ liable for them in the ordinary way’.” [¶¶ 117‑127].

In the light of these findings of fact, a majority of the House decides not to disturb the trial judge’s award.

Citation: Douglas v. Hello! Ltd., [2007] 2 W. L. R. 920; [2007] U. K. H. L. 21; 2007 WL 1243172 (HL) (May 2, 2007). [See also 2005 International Law Update 119].

Serbia’s cooperation with ICTY leads to release of U.S. funds. Secretary of State Condoleezza Rice has certified that Serbia has met the criteria of Section 563 of the Foreign Operations, Export Financing and Related Programs Appropriations Act, 2006, as carried forward by the 2007 Continuing Resolution. This decision will release about $6 million in U. S. assistance suspended on May 31, 2007. Serbia recently took several steps to comply with Section 563, such as by facilitating the arrest of two fugitive indictees for trial before the International Criminal Tribunal for the Former Yugoslavia (ICTY) The new government in Belgrade also publicly committed itself to full cooperation with ICTY. The U.S. expects all leaders in the region to assist in arresting all indictees still at large, especially Ratko Mladic and Radovan Karadzic for transfer to the ICTY. Citation: Press Statement #2007/545, U.S. Department of State, Office of Spokesman Sean McCormack, Washington, D.C., Monday, July 3, 2007.

China and U.S. agree to expand bilateral air service for passengers and cargo. After more than one year of discussions, civil‑aviation negotiators from the U.S. and China have agreed in principle to amend their bilateral air services agreement to allow substantially expanded air service between the two countries. When finalized soon, the agreement will make 4 major changes. First, it will add 10 new passenger flights that U.S. carriers may operate daily to the Chinese gateway cities of Beijing, Shanghai and Guangzhou over 2008‑2012, doubling the present number. Second, as of 2011, it will allow unlimited U.S. cargo flights by an unlimited number of cargo carriers to any point in China. Third, by 2011, it will increase from 6 to 9 the number of U.S. passenger carriers that may serve the Chinese market. Finally, it will expand opportunities for U.S. carriers to code‑share on other U.S. carriers’ flights to China. Moreover, this arrangement commits the U.S. and China to launch “Open Skies” negotiations in 2010. Citation: Media Note #2007/414, U. S. Department of State, Office of the Spokesman, Washington, D.C., released on Wednesday, May 23, 2007.

U.S. labor law applied to imported foreign workers. On May 16, a Federal District Court in New Orleans ruled that federal minimum wage laws applied to foreign guestworkers brought into the United States by companies facing labor shortages. Specifically, the Court found that workers hired by Decatur Hotels in New Orleans had the right to sue their employer under the Fair Labor Standards Act. The Plaintiffs are seeking reimbursement for the thousands of dollars in travel and other costs they spent to get the hotel jobs. They contend that the company’s failure to do so left them working for less than the statutory minimum wage. This appears to be the first federal ruling on this issue, and it might affect thousands of foreign workers throughout the U.S. Citation: The New York Times (on line), New Orleans, Louisiana, Friday, May 18, 2007 (byline of Leslie Eaton). For text of opinion, see Castellanos‑Contreras v. Decatur Hotels, L.L.C., 488 F. Supp.2d 565 (E. D. La., 2007).

Sweden and United States agree to finance renewable energy projects. On June 28, the U. S. and Sweden agreed to jointly fund projects aimed at developing renewable‑energy technology. The Swedish government said it would set aside about US$18.1 million for the program, which includes a project with Swedish truck maker Volvo AB and its U.S. subsidiary Mack Trucks. As part of the program, the two governments and Volvo agreed to jointly finance a US$9 million project aimed at developing powertrains based on alternative fuels. The U.S. has previously entered into similar arrangements with Brazil and China. Citation: The Associated Press (online), Stockholm, Sweden, Thursday, June 28, 2007 at 15:11:07Z.