2009 International Law Update, Volume 15, Number 5 (May)

2009 International Law Update, Volume 15, Number 5 (May)

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

EVIDENCE (OF FOREIGN LAW)

In U.S. litigation over injury on high seas to captain of ocean-going motor yacht designed and built in Holland, Eleventh Circuit holds that parties’ inadequate proof of Dutch law, inter alia, leads Court, in light of strong U. S. links, to apply American law on important issues

Jameson Cooper (Plaintiff) was the captain of a 198-foot motor yacht named the M/Y MEDUSE (the MEDUSE). Toward the end of July 2005, the ship’s foodlift accidentally landed on his leg causing severe injuries. The MEDUSE was sailing somewhere in the Red Sea at the time of the accident.

De Vries Scheepsbow B. V. (De Vries) is the entity that built the MEDUSE for Meridian Yachts Ltd. (Meridian). F. De Voogt, N. A. (De Voogt) is the entity that De Vries subcontracted with to design the ship. De Vries and Meridian signed a shipbuilding agreement in English (the Agreement) on January 31, 1994; it governed the manufacture and the payment for the vessel. The Netherlands shipyard that built the vessel delivered the finished ship to Meridian at a Dutch seaport in January 1997.

The parties further agreed that the ship’s “shakedown” cruise would take the ship to Florida waters. When the MEDUSE arrived there, De Vries would send a finish crew to resolve any problems that might have become apparent during that trans-Atlantic cruise. The buyer was to make the final payment in Florida after the finish crew completed its job.

Article 13 of the Agreement has a choice-of law-provision: “This Agreement, and all disputes arising out of or in connection with it, shall be construed in accordance with and shall be governed by the Dutch law.”

The present appeal arises out of the third-party Plaintiffs’ efforts to recover the sums paid to settle the maritime personal injury action. Specifically, the third-party Plaintiffs seek indemnity, contribution and equitable subrogation from the third-party Defendants, who allegedly built, designed or maintained the allegedly defective foodlift. A crucial question below was whether Dutch law or federal maritime law applied to the third-party action.

The district court, finding in favor of Dutch law, dismissed the action, determining on summary judgment, that a ten-year statute of repose barred the third-party claims The main issues presented before the Court of Appeals turn on the interpretation of the Agreement entered into between the shipowner (third-party Plaintiff) and the shipbuilder (third-party Defendant). Two provisions within the Agreement are particularly relevant: a Dutch choice-of-law clause and a limitation-of-liability provision.

As a signatory to the Agreement, the shipowner is the only third-party Plaintiff whom the Dutch choice-of-law provision potentially binds. The broad wording of that provision, however, indicates that it also applies to the shipowner’s third-party claims against the shipbuilder.

The second set of issues presented to the Court center on those third-party claims which are wholly independent of the Agreement. With respect to those third-party claims, the Court must first decide whether Dutch law governs them, rather than federal maritime law, or a third jurisdiction’s law. The other third-party Plaintiffs include (1) in rem, the ship itself on which the injury took place, (2) the ship’s manager and (3) the injured sea captain’s maritime employer.

Dutch law governs the claims brought against the Dutch shipbuilder and designer by the third-party Plaintiffs who are non-signatories to the main Agreement because the Netherlands would have an interest in the resolution of those disputes, whereas the U. S. has little or no such interest.

An overview of Dutch law suggests that the Dutch statute of repose bars the third-party claims that rest upon a strict liability theory. The third-party Plaintiffs, however, also allege general tort claims. For these claims, Dutch law furnishes a separate statute of limitations; it would allow the general tort claims to proceed. Finally, federal maritime law applies to the claims against the Dutch shipbuilder’s and the designer’s affiliate American corporation; this renders timely all third-party claims against that Defendant.

The owner had registered the MEDUSE in the Cayman Islands; it is a British colony lying northwest of Jamaica in the Caribbean area. The ship travels worldwide and has docked in South Florida as well as at other ports in the United States. Meridian, which both originally bought and currently owns the MEDUSE, is a business entity organized under the laws of the British Virgin Islands (BVI).

Vulcan Maritime Ltd. (Vulcan employer), Plaintiff’s employer at the time of his accident, is a BVI Corporation. Vulcan, Inc. (which Plaintiff alleged to have been the manager of the MEDUSE and its crew at the time of his accident) is a state of Washington company—where the four appellants allege it has its principal place of business.

The Plaintiff has alleged that Meridian and Vulcan employer have their principal places of business in Florida. All four Appellants, however, deny these allegations. They also claim that a U. S. citizen beneficially owns them and that a U. S. citizen is president of Meridian, Vulcan manager and Vulcan employer.

The shipbuilder and ship-designer Appellees (DSAs), De Vries and De Voogt, are both foreign corporations with their principal places of business in the Netherlands. The four Appellants allege that the DSAs along with their American affiliate, Feadship America, Inc. (Feadship), carry on business in the U. S. under a market consortium or a joint venture known as “Feadship,” which maintains a local office in Florida. The courts refer to De Vries, De Voogt and Feadship America as Appellees. Specifically, the four Appellants allege that, as part of the Feadship venture, the DSAs design, manufacture, market, sell and distribute Feadship yachts, including the MEDUSE.

Feadship America is a Florida corporation with its principal place of business in that state. The four appellants allege that the Feadship venture conducts business in the U. S. through Feadship America, and that Feadship America takes part in the sale and distribution of Feadship designed and manufactured yachts.

According to Appellees, a Dutch company called All-In Lifttechniek B. V. (not a party to this action) designed, manufactured and installed the foodlift in De Vries’ shipyard. Appellees further claim that Feadship America had nothing to do with the sale, manufacture or design of the MEDUSE.

In October 2006, Plaintiff filed this federal action in the Southern District of Florida seeking damages for the injuries he suffered on board the MEDUSE. Plaintiff asserted a general maritime claim of “unseaworthiness” against Meridian as owner of the ship and against the MEDUSE in rem. Plaintiff further alleged a claim for Jones Act negligence against Vulcan Maritime Ltd. as Plaintiff’s maritime employer and a general maritime negligence claim against Vulcan, Inc. as the manager of the MEDUSE and its crew. In July 2007, the four Appellants filed a third-party complaint against De Vries, the shipbuilder, De Voogt, the designer of the ship, and Feadship America, their American affiliate. The four Appellants sought to hold them liable for any damages that the courts could potentially award to Plaintiff. The amended third-party complaint alleges that one or more of the [Appellees] designed, installed, built and inspected the foodlift that injured the Plaintiff.

On November 30, 2007, the four Appellants settled Plaintiff’s personal injury action and the case remained pending only with respect to the four Appellants’ claims against the Dutch shipbuilding Appellees and Feadship America, their American affiliate. Following settlement, the four Appellants filed an amended third-party complaint seeking recovery of the sums paid to Plaintiff. Appellees moved for summary judgment. On June 3, 2008, the district court held that the Agreement between Meridian and De Vries governed the construction of the MEDUSE, including the allegedly defective foodlift; thus Meridian’s claims, which arose out of, or in connection with, the Agreement, were subject to the Agreement’s Article 13 choice of Dutch law provision. Therefore, the ten-year Dutch statute of repose barred the claims brought by Meridian, the only one of the four Appellants who was a signatory to the Agreement. This appeal followed.

In a scholarly and thorough July 21 opinion by Judge David O. Trager, District Judge for the Eastern District of New York (sitting by designation) affirms in part, reverses in part and remands. Cooper v. Meridian Yachts, Ltd, 2009 WL 2146388 (11th Cir. 2009).

Much of Judge Trager’s opinion revolves around the question of what law applies to the various issues raised and as to the adequacy of the evidence as to Dutch law. Federal Rule of Civil Procedure 44. 1 provides as follows: “Determination of Foreign Law. A party who intends to raise an issue concerning the law of a foreign country shall give notice by pleadings or other reasonable written notice. The court, in determining foreign law, may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence. The court’s determination shall be treated as a ruling on a question of law. ” See, e. g., Seguros del Estado, S. A. v. Scientific Games, Inc., 262 F. 3d 1164, 1171 (11th Cir. 2001).

“Normally, an un-rebutted affidavit from an attorney on foreign law would be sufficient to establish the substance of that law. While it no doubt would make our task easier to simply accept this representation of Dutch law, we have doubts about this source on Dutch law, considering the affidavit’s incomplete, if not inaccurate, representations concerning the Dutch statute of repose.”

“Furthermore, on the issue of limitation of liability, the affidavit gives no citation to any provision of the Dutch Civil Code and relies on one Dutch Supreme Court case, which impliedly would support its position but fails to provide a copy and translation of that opinion. Moreover the affidavit’s reference to ‘standing jurisprudence’ is not explained.” [Slip op. 8]

“Although we endeavored to conduct independent research of Dutch law on this issue, we were unsuccessful. Unlike the issue of the scope of the Dutch statute of repose, we were unable to find any materials in English on the limitation-of-liability issue. Accordingly, we follow the usual rule where the parties have not taken steps to present the court with relevant foreign law and turn to the law of the forum in interpreting this provision. See Cavic v. Grand Bahama Dev. Co. , Ltd. , 701 F. 2d 879, 882 (11th Cir. 1983) (‘When both parties have failed to prove the foreign law, the forum may say that the parties have acquiesced in the application of the local law of the forum.’ (quoting Restatement (Second) of Conflict of Laws § 136 cmt. h (1971)); see also Mutual Serv. Ins. Co. v. Frit Indus., Inc., 358 F. 3d 1312, 1321-22 (11th Cir. 2004).”

“In this instance, this default analysis leads to the same result. The initial question is what is the forum [law] for this purpose. One might presume it to be federal maritime law. However, a contract for the sale or construction of a ship is not within the federal courts’ admiralty jurisdiction. Richard Bertram & Co. v. The Yacht, Wanda, 447 F. 2d 966, 967 (5th Cir. 1971). Thus, as a disinterested forum, it would seem appropriate for a federal court sitting in admiralty to look to the state law with an interest in the issue. We are left to determine which state law that is. We conclude that Florida law provides the relevant law on this issue. ”

“From a governmental interest point of view, no individual jurisdiction within the United States appears to have a significant interest in this action. It concerns foreign entities, namely companies from the British Virgin Islands and the Netherlands. The parties have not provided this court with sufficient information on how British Virgin Islands law or Dutch law would resolve this dispute.”

“Furthermore, it is reasonable to apply Florida law because it was the original forum of this litigation, it has some factual connections to this litigation and no other jurisdiction has stronger ties. See, e. g., Cavic, supra at 882 (‘Because the parties did not raise any conflict of laws issue in the district court and do not raise it on appeal, under applicable conflict of laws principles the law of the forum (Florida) would govern the substantive issues due to the absence of facts justifying the application of the law of some other jurisdiction.” [Slip op. 9]

Citation: Cooper v. Meridian Yachts, Ltd., No. 08-13830 (11th Cir. July 21, 2009) (11th Cir. 2009).

FORUM NON CONVENIENS

In litigation over collision between containership and large dredge in Chinese river, where admiralty action began in China but one party later filed multiple actions in U. S. , Fourth Circuit affirms forum non conveniens dismissal of U. S. case in favor of Chinese forum and, because of fortuitous delays that occurred, conditions its dismissal on nonassertion of statute of limitations or missed deadline in Chinese proceedings

In March 2007, the containership MSC Joanna (owned by a Panamanian corporation and chartered by a Swiss corporation) collided with the world’s largest dredge, the W. D. Fairway, in the ship channel leading to the port of Tianjin, China. Several Netherlands corporations jointly own and charter the dredge under the name “Boskalis.” The Fairway sank in shallow water and was later salvaged. The Tianjin Maritime Safety Administration investigated the collision, interviewed witnesses, and prepared diagrams.

Legal proceedings began in the Tianjin Admiralty Court where the Chinese subcharterer of the dredge—CCCC Tianjin Dredging—filed a claim for $19. 5 million in damages. The charterer of the MSC Joanna deposited about $20 million with the Tianjin Admiralty Court as a limitation fund. Boskalis, however, filed eight different court actions in four different U. S. district courts. It sought attachment of MSC chartered vessels and other relief to escape the limitation on its damages in the Chinese proceeding.

The Panamanian and Swiss corporations then filed the present action on behalf of the MSC Joanna; the defendants, however, moved for a forum non conveniens (FNC) dismissal in favor of the Chinese proceeding. MSC posted a security of $111 million as required by U. S. law for calculating limitation of liability. Boskalis responded that it could not prosecute its claims in China because the applicable statute of limitations had run out. This is a question of foreign law and the parties disagree on its content and effect. [See Federal Rule of Civil Procedure 44. 1 on Proof of Foreign Law].

The district court found that liability for the collision had little or no connection to the U. S. —except that other MSC vessels do call in U. S. ports. The court granted the FNC motion, and enjoined the other U. S. actions. The district court also noted that Boskalis had purposely let the Chinese statute of limitations run out and deliberately declined to take part in the Chinese proceeding.

The U. S. Court of Appeals for the Fourth Circuit affirms the FNC dismissal. It added a proviso, however, that barred the affirmative assertion of any applicable statute of limitations or defense in the Chinese proceeding based on a missed deadline.

The Court first explains that Boskalis’ principal, if not only, strategic concern with litigating the dispute in China is that the limitation fund created in China is only $20 million, and its claim for damages amounts to $326 million. Moreover, a limitation fund created in a U. S. court could be much larger than in China and could equal the post-collision value of the vessel and of pending freight cargo. In this case, the collision had damaged the MSC Joanna, a large containership, to a relatively minor extent; this left the vessel with a post-collision value (including pending freight) of more than $111 million.”

“Accordingly, Boskalis is seeking to take advantage of the more generous U. S. limitation-of-liability law; if it cannot succeed, it is willing to waive taking part in the Chinese proceedings, having anticipated that it would receive little or no recovery from them. Put bluntly, Boskalis has gambled on the possibility that the U. S. courts might allow it to proceed in the United States to resolve the claims between it and MSC Shipping; it also risked that it will obtain no recovery at all from either a U. S. court or a Chinese court.” [Slip op. 12]

The Court then turns to the FNC issue. “Granting a motion to dismiss for forum non conveniens rests in the discretion of the district court exercised upon [the] consideration of numerous factors. These include (1) the ease of access to sources of proof; (2) the availability of compulsory process for securing the attendance of unwilling witnesses; (3) the costs of obtaining the attendance of witnesses; (4) the ability to view the premises; (5) the general facility and cost of trying the case in the selected forum; and (6) the public interest, including administrative difficulties, (7) the local interest of having localized controversies decided at home, and the interest of trying cases where the substantive law applies. See [American Dredging Co. v. Miller, 510 U. S. 443, 448 (1994)] . . . ”

“Applying these factors, the district court made findings, based on undisputed evidence, that no nexus—whether the parties, the witnesses, or the law—exists between the United States and the collision at issue. . . . The prospect of having to interpret and apply Chinese law as it might pertain to liability and the need for the many interpreters for the various involved parties was further given as a reason supporting the district court’s conclusion that the public interest weighed overwhelmingly toward dismissal. Accordingly, it exercised its discretion to dismiss this case under the [FNC] doctrine.” [Slip op. 17-18]

Here, the collision took place in Chinese territorial waters and Chinese authorities have investigated it. All parties are foreign corporations, and no American citizen was on board. Most of the evidence lies in China, and a U. S. court proceeding would demand a large number of interpreters. Thus, the district court did not abuse its discretion by dismissing this action.

The Court, however, disagrees with the district court’s statement that it is unsound to allow a party to assert the unavailability of an alternative forum when the unavailability results from its own purposeful conduct. Here, Boskalis deliberately failed to take part in the Chinese proceeding because of the recovery limitation.

“This difference in the method of calculating the limitation funds [as between the U. S. and China] indicates, in the circumstances of this case, that the U. S. forum would be more favorable to Boskalis than would a Chinese forum. Indeed Boskalis argues that because of the Chinese subcharterer’s claim, the Chinese priority laws would result in a recovery in China of less than a million dollars. MSC Shipping vigorously disputes this interpretation of Chinese law, arguing that Boskalis might be entitled to a much higher percentage of the Chinese fund.”

“But we need not, and surely should not, speculate on how Chinese courts might resolve the claims against the limitation fund there. The Supreme Court has made clear that appeals courts are not ‘to compare the rights, remedies, and procedures available under the law that would be applied in each forum’ to determine whether ‘the law applied by the alternative forum is as favorable to the plaintiff as that of the chosen forum. ’ [Piper Aircraft Co. v. Reyno, 454 U. S. 235, 251 (1981)] . . . To do so would defeat the intended purpose of the [FNC] doctrine which ‘is designed in part to help courts avoid conducting complex exercises in comparative law. ’ . . . ”

“What we can conclude is that the Chinese forum offers a remedy and process for resolving the dispute – which happens to comport with the international norm for doing so – and thus we should not conduct a ‘complex exercise[ ] in comparative law’ to determine the exact difference Boskalis may be entitled to between the different limitation funds.” [Slip op. 24-25]

“U. S. courts should be ready to rely on their wide discretion and decline to exercise jurisdiction when doing so will avoid the danger of U. S. courts becoming a place for resolving a maritime dispute only because U. S. law might provide a more favorable outcome for one of the litigants. The circumstances of this case provide a prime example of when a U. S. court should show restraint.” [Slip op. 27]

Citation: Compania Naviera Joanna SA v. Koninklijke Boskalis Westminster NV, 569 F. 3d 189 (4th Cir. 2009).

JURISDICTION (PERSONAL)

Where diversity breach of contract action was filed in Virginia federal court, Fourth Circuit rules that transactions of two U. S. corporations with India company lacked minimum contacts with Virginia thus depriving court of personal jurisdiction over foreign company

This dispute arose from a series of interactions among three companies involving a software and structural design project to be carried out in India. Structure Works, LLC (SW), a Colorado corporation, hired Geometric Software Solutions (GSS), an Indian corporation, to work on the project. Consulting Engineers Corp. (CEC) is a Virginia corporation with two branch offices in India. SW, believing that CEC might be able to assist GSS in India with one aspect of this project, arranged a conference call in early 2004 in which it introduced the two outfits.

In early February 2004, Plaintiff and GSS entered into a non-disclosure agreement (NDA-1) in which each party agreed, inter alia, not to recruit certain named employees from the other. The parties also agreed that Virginia law (except Virginia choice of law rules) would govern the agreement. NDA-1 did not contain a forum selection clause. GSS negotiated NDA-1 from India, and Plaintiff negotiated from Virginia. The negotiations leading to the agreement amounted to 4 e-mail exchanges and several phone calls. GSS signed the agreement in India.

Plaintiff entered into a separate non-disclosure agreement (NDA-2) with SW. NDA-2 specified that Colorado law would govern all disputes and that Colorado would be the forum for any litigation over the agreement. These negotiations, as well as discussions regarding the potential project, consisted of 24 e-mails (eight from SW and sixteen from Plaintiff) and several telephone calls. Plaintiff and SW each negotiated from their home offices in Virginia and Colorado respectively.

In mid-February 2004, representatives from SW, GSS, and Plaintiff held their first and only face-to-face meeting at GSS’s office in India. The negotiations over the potential assistance lasted from February until May 2004. In May 2004, GSS hired Plaintiff employee Manoj Kumar, one of the employees named in NDA-1. Plaintiff had employed Kumar in one of its Indian offices. GSS hired Kumar in India for work to be performed in India. Thereafter, SW elected not to pursue the software and structural design project with Plaintiff.

Nearly two years later, in March 2006, Plaintiff filed suit against SW and GSS in state court in Fairfax, Virginia. Plaintiff alleged various tort claims against SW and tort and contractual claims against GSS. All the claims came about from GSS’s hiring of Kumar. SW and GSS removed the action to the Eastern District of Virginia based on the diversity of the parties. SW and GSS then each moved to dismiss, inter alia, claiming lack of personal jurisdiction. The district court granted the motions, holding that it lacked general and specific personal jurisdiction over SW and GSS. Plaintiff timely appealed only the district court’s holding that it lacked specific jurisdiction over the defendants. The U. S. Court of Appeals for the Fourth Circuit affirms.

The Court then explains its reasoning. “We review de novo a district court’s dismissal for lack of personal jurisdiction, although we review for clear error any underlying factual findings. Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc. (Carefirst), 334 F. 3d 390, 396 (4th Cir. 2003). Where, as here, the district court addresses the question of personal jurisdiction on the basis of motion papers, supporting legal memoranda, and the allegations in the complaint, the plaintiff bears the burden making a prima facie showing of a sufficient jurisdictional basis to survive the jurisdictional challenge. Combs v. Bakker, 886 F. 2d 673, 676 (4th Cir. 1989).”

“In considering Plaintiff’s assertion of personal jurisdiction, we first set forth the applicable law. A federal district court may only exercise personal jurisdiction over a foreign corporation if such jurisdiction is authorized by the long-arm statute of the state in which it sits and application of the long-arm statute is consistent with the due process clause of the Fourteenth Amendment, U.S. Const. amend. XIV § 1. Carefirst, supra at 396; see also Stover v. O’Connell Assoc., Inc. , 84 F. 3d 132, 136 (4th Cir. 1996). We turn first to state law.”

“The relevant portion of Virginia’s long-arm statute provides, ‘A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action arising from the person’s . . . [t]ransacting any business in this Commonwealth. ’ Va. Code Ann. § 8. 01-328. 1(A)(1). ”

“The exercise of personal jurisdiction is proper, then, only if the asserted cause of action ‘aris[es] from’ the non-resident defendant’s ‘[t]ransacting business’ in Virginia. § 8. 01-328. 1(A)(1); [Cites]. Because Virginia’s long-arm statute is intended to extend personal jurisdiction to the extent permissible under the due process clause, the statutory inquiry merges with the constitutional inquiry. Young v. New Haven Advocate, 315 F. 3d 256, 261 (4th Cir. 2002) . . . ; see also English & Smith v. Metzger, 901 F. 2d 36, 38 (4th Cir. 1990); Peninsula Cruise, Inc. v. New River Yacht Sales, Inc. , 257 Va. 315, 512 S. E. 2d 560, 562 (1999).”

“We turn next to the constitutional analysis. To satisfy the constitutional due process requirement, a defendant must have sufficient ‘minimum contacts’ with the forum state such that ‘the maintenance of the suit does not offend traditional notions of fair play and substantial justice.’ Int’l Shoe Co. v. Wash., 326 U. S. 310, 316 (1945).”

“The minimum contacts test requires the Plaintiff to show that the defendant ‘purposefully directed his activities at the residents of the forum’ and that the Plaintiff’s cause of action ‘arise[s] out of’ those activities. Burger King Corp. v. Rudzewicz, 471 U. S. 462, 472 (1985). This test is designed to ensure that the defendant is not ‘haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts. ’ Burger King, supra at 475.”

“It protects a defendant from having to defend himself in a forum where he should not have anticipated being sued. See World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286, 297(1980). Because a sovereign’s jurisdiction remains territorial, to justify the exercise of personal jurisdiction over a non-resident defendant, the defendant’s contacts with the forum state must have been so substantial that ‘they amount to a surrogate for presence and thus render the exercise of sovereignty just.’ ESAB Group, Inc. v. Centricut, Inc. , 126 F. 3d 617, 623 (4th Cir. 1997). ” [277]

“This court has synthesized the due process requirements for asserting specific personal jurisdiction in a three part test in which ‘we consider (1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; (2) whether the plaintiffs’ claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable. ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F. 3d 707, 712 (4th Cir. 2002).”

“The first prong articulates the minimum contacts requirement of constitutional due process – that the defendant purposefully avail himself of the privilege of conducting business under the laws of the forum state. While this requirement is not susceptible of mechanical application, see Int’l Shoe, supra at 319; Kulko v. Superior Court, 436 U. S. 84, 92 (1978), courts have considered various nonexclusive factors in seeking to resolve whether a defendant has engaged in such purposeful availment.”

“In the business context, these factors include, but are not limited to: (1)whether the defendant maintains offices or agents in the forum state, see McGee v. Int’l Life Ins. Co., 355 U. S. 220, 223 (1957); (2) whether the defendant owns property in the forum state, see Base Metal Trading, Ltd. v. OJSC, 283 F. 3d 208, 213 (4th Cir. 2002); (3) whether the defendant reached into the forum state to solicit or initiate business, see McGee, supra at 221; Burger King, supra,. at 475-76; (4) whether the defendant deliberately engaged in significant or long-term business activities in the forum state, see Burger King, supra at 475-76, 481; (5) whether the parties contractually agreed that the law of the forum state would govern disputes, see Burger King, supra at 481-82; (6) whether the defendant made in-person contact with the resident of the forum in the forum state regarding the business relationship, see Hirschkop & Grad, P. C. v. Robinson, 757 F. 2d 1499, 1503 (4th Cir. 1985); (7) the nature, quality and extent of the parties’ communications about the business being transacted, see English & Smith, supra at 39; and (8) whether the performance of contractual duties was to occur within the forum, see Peanut Corp. of Am. v. Hollywood Brands, Inc., 696 F. 2d 311, 314 (4th Cir. 1982).”

“Through an analysis of such factors, if a court finds that the defendant has availed himself of the privilege of conducting business in the forum, specific jurisdiction exists. ‘[B]ecause [the defendant’s] activities are shielded by the benefits and protections of the forum’s laws, it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well.’ Burger King, supra at 476. If, and only if, we find that the Plaintiff has satisfied this first prong of the test for specific jurisdiction need we move on to a consideration of prongs two and three.” [278]

“The second prong of the test for specific jurisdiction – that the plaintiff’s claims arise out of the activities directed at the forum – requires that the defendant’s contacts with the forum state form the basis of the suit. See Burger King, supra at 472; Helicopteros Nacionales de Colombia, S. A. v. Hall, 466 U. S. 408, 414 (1984). If the plaintiff satisfies prongs (1) and (2), prong (3) comes into play.”

“The third prong—that the exercise of personal jurisdiction be constitutionally reasonable — permits a court to consider additional factors to ensure the appropriateness of the forum once it has determined that a defendant has purposefully availed itself of the privilege of doing business there. Such factors include: (a) the burden on the defendant of litigating in the forum; (b) the interest of the forum state in adjudicating the dispute; (c) the plaintiff’s interest in obtaining convenient and effective relief; (d) the shared interest of the states in obtaining efficient resolution of disputes; and (e) the interests of the [involved] states in furthering [their] substantive social policies. See Burger King, supra, at 477.”

“With that background in mind, we now turn to Plaintiff’s arguments that the district court erred in finding that it lacked specific personal jurisdiction over SW and GSS. We consider Plaintiff’s arguments against these entities in turn. Plaintiff’s tort claims against SW are based on SW’s alleged conspiracy with GSS to violate NDA-1 by hiring Kumar. The contacts that support Plaintiff’s assertion of jurisdiction consist of approximately 4 telephone conversations and 24 e-mails, 8 of which were sent by SW. The substance of these communications, according to Plaintiff, included the negotiation of NDA-2 and discussion of a proposal for Plaintiff’s services. Plaintiff argues that SW ‘sought out’ and ‘transact[ed] business with’ Plaintiff, and therefore ‘by its own actions . . . created a relationship with a Virginia citizen.’”

“Plaintiff asserts that SW ‘intentionally directed electronic communications into Virginia with the clear intent of transacting business there.’ Plaintiff maintains that the district court erred in holding that it lacked specific jurisdiction over SW because these communications constituted the requisite minimum contacts with Virginia. We disagree.”

“We look to the quality and nature of the contacts in evaluating whether they meet the minimum contacts requirement. Harking back to the factors distilled from the case law, it becomes apparent that the contacts described by Plaintiff do not support the conclusion that SW purposefully availed itself of the privilege of doing business in Virginia to an extent sufficient to justify personal jurisdiction.” [279]

“SW did not have offices or employees in Virginia, nor did it own property there. It had no on-going business activity in Virginia. The record does not reflect any in-person contact with Plaintiff in Virginia. SW negotiated NDA-2 from, and signed it in, Colorado, and the agreement includes a Colorado choice-of-law and choice-of-forum clause. Any work contemplated by the discussions would have been performed in India; no formal agreement was ever reached to perform the work; and, indeed, the very activity of which Plaintiff complains—the hiring of Kumar—took place in India.”

“Further, because the alleged conspiracy (between two non-Virginia corporations) and alleged tortious interference with an at-will contract occurred in India, Indian law would govern under Virginia’s choice of law provisions. For torts, under Virginia’s choice of law rules, claims are analyzed under the law governing the place of the alleged wrong. [Cite]. The place of [the] alleged wrong is the place ‘where the last event necessary to make an act liable for an alleged tort takes place. ’ Quillen v. Int’l Playtex, Inc. , 789 F. 2d 1041, 1044 (4th Cir. 1986). Here, this ‘last event’ would be GSS’s hiring of Kumar [in India].”

“Although Plaintiff argues that SW reached out to it in Virginia, this assertion, even when coupled with the cited communications, is not enough to overcome the factors noted above. On these facts, SW’s contact with Virginia was simply too attenuated to justify the exercise of personal jurisdiction.”

“Plaintiff also argues that jurisdiction exists based on the so-called ‘effects test. ’ See Carefirst, supra at 398 n. 7. Under that test, the plaintiff must establish that specific jurisdiction is proper by showing that ‘(1) the defendant committed an intentional tort; (2) the plaintiff felt the brunt of the harm in the forum, such that the forum can be said to be the focal point of the harm; and (3) the defendant expressly aimed his tortious conduct at the forum, such that the forum can be said to be the focal point of the tortious activity.’ Id. Plaintiff argues that because Plaintiff suffered its economic injury in Virginia, and SW allegedly intentionally aimed its conduct at Virginia, the exercise of personal jurisdiction is proper.”

“The effects test does not aid Plaintiff on the facts here. As we explained in Carefirst, part of the effects test requires the plaintiff to establish that the defendant expressly aimed his tortious conduct at the forum, such that the forum can be said to be the focal point of the tortious activity. Plaintiff has failed to demonstrate that the focal point of the alleged tortious activity was Virginia. Rather, as previously noted, the focal point of the alleged tortious transaction was India: the individuals named in NDA I worked in India; the only face-to-face meeting between the parties took place in India; the performance of any potential contract between the parties was to occur in India; and the alleged tortious activity took place in India.” [280]

“The effects test does not supplant the minimum contacts analysis, but rather informs it. As we noted in ESAB Group, ‘[a]lthough the place the plaintiff feels the alleged injury is plainly relevant to the [jurisdictional] inquiry, it must ultimately be accompanied by the defendant’s own contacts with the state if jurisdiction over the defendant is to be upheld. ’ ESAB Group, supra, at 626.”

“SW’s contacts with the forum state were sufficiently attenuated that it would be a manifest injustice to hale it into Virginia court. The district court did not err in concluding that it lacked specific personal jurisdiction over SW.”

“Plaintiff alleges both tort and contract claims against GSS. Plaintiff argues that the district court erred in holding that it lacked specific jurisdiction over GSS because GSS (1) ‘initiated contact with Plaintiff via telephone and e-mail’; (2) ‘negotiated the terms of [NDA-1] with Plaintiff’; and (3) ‘agreed that Virginia law governed [NDA-1].’”

“Plaintiff urges that the inclusion of the choice of law clause in NDA-1 ‘preemptively waives any potential challenges to Virginia’s jurisdiction.’ This provision, however, while significant, cannot by itself carry the weight Plaintiff would assign to it. The inclusion of a choice of law clause is one factor that a court may take into account in determining whether the exercise of personal jurisdiction is justified, but it is no more than that. Burger King, supra at 482 (‘[S]uch a [choice of law] provision standing alone would be insufficient to confer [personal] jurisdiction.’).”

“Indeed, Plaintiff appears to [have] recognize[d] as much. In an earlier pleading, Plaintiff acknowledged that such a clause is ‘not dispositive of a personal jurisdiction question.’ The jurisdictional inquiry remains centered on the extent, nature, and quality of GSS’s contacts with Virginia. See Burger King, supra at 481-82; see also Nw. Airlines, Inc. v. Astraea Aviation Servs. , Inc. , 111 F. 3d 1386, 1390 (8th Cir. 1997).”

“Here, the communication between GSS and Plaintiff consisted of an exchange of four brief e-mails, several telephone conversations about NDA-1, and the exchange of the various drafts. Even when considered together with the choice of law provision, the contacts described do not make out a prima facie showing of a sufficient jurisdictional basis to survive challenge.”

“GSS is based in, and negotiated solely from, India. GSS owns no property in Virginia. None of GSS’s employees work in Virginia; none have ever even traveled to Virginia. Although Plaintiff contended that GSS ‘initiated’ contact with it in Virginia, the record does not support this assertion. The record reflects, and indeed Plaintiff does not dispute, that the two parties were first introduced on a joint conference call with SW.” [281]

“GSS engaged in no on-going business activities in Virginia, and the only in-person meeting among the parties occurred in India. If the parties had consummated their agreement to work together, the work would have been performed in India. Again, the activity of which Plaintiff complains—the hiring of Kumar in alleged violation of NDA-1 — took place in India. The alleged conspiracy and interference with an at-will contract occurred outside of Virginia, involving an alleged plan between two non-Virginia corporations to hire an employee working in India. Considering all the factors here, and despite the choice of law clause in NDA-1, we conclude that the district court did not err in holding that GSS’s contacts with Virginia were too attenuated to support specific personal jurisdiction.”

“The third prong of the specific jurisdiction test also likely weighs against exercising personal jurisdiction over GSS, an Indian corporation. As the Supreme Court has explained, ‘[t]he unique burdens placed upon one who must defend oneself in a foreign legal system should have significant weight in assessing the reasonableness of stretching the long arm of personal jurisdiction over national borders.’ Asahi Metal Ind. Co. v. Superior Court, 480 U. S. 102, 114 (1987); see also Foster v. Arletty, 3 Sarl, 278 F. 3d 409, 414 (4th Cir. 2002).”

“Because Plaintiff has failed to satisfy the first prong of the specific jurisdiction test, a detailed analysis of this third prong is unnecessary.”

“Because Plaintiff failed to demonstrate that SW and GSS had sufficient contacts with Virginia to satisfy the due process minimum contacts requirement, the district court’s holding that it lacked specific personal jurisdiction over the defendants is affirmed. ” [282]

Citation: Consulting Engineers Corp. v. Geometric Ltd. , 561 F. 3d 273 (4th Cir. 2009).

VIENNA CONSULAR CONVENTION

In review of successive habeas petitions of Mexican citizen on death row in U. S. after ICJ ruling in Avena, Supreme Court of California finds that Medellin case bars successive habeas petitions and that Court had reviewed and denied petitioner’s first habeas petition on the merits based on Article 36 of Convention

Omar Fuentes Martinez (Petitioner) is a Mexican citizen on death row in California for killing a man to whom he owed back wages. He filed a habeas corpus petition in 2002 in the Supreme Court of California, claiming that U. S. authorities had failed to inform him of his consular notification rights under the Vienna Convention on Consular Relations, Article 36 (in force for U. S. , Dec. 24, 1969) [21 U. S. T. 77, 102; T. I. A. S. 6820; 596 U. N. T. S. 261] [the Convention].

This is the most relevant Convention language. “Article 36: Communication and Contact with Nationals of the Sending State: . . . (b) If he so requests, the competent authorities of the receiving State shall, without delay, inform the consular post of the sending State if, within its consular district, a national of that State is arrested or committed to prison or to custody pending trial or is detained in any other manner . . . The said authorities shall inform the person concerned without delay of his rights under this sub-paragraph; . . . ”

The Supreme Court of California denied that habeas petition on the merits in October 2004. In February 2005, then-President George W. Bush issued a Presidential Memorandum, directing state courts to implement the decision of the International Court of Justice (ICJ) in Avena and Other Mexican Nationals (Mexico v. U. S. ) 2004 I. C. J. 12 (Judgment of March 31) (Avena).

In that case, the ICJ held that the U. S. had violated the Convention rights of 51 Mexicans then on death row by failing to notify the Mexican consulate. Petitioner is one of them. The ICJ directed the U. S. courts to review the convictions and sentences of those Mexican citizens to determine whether they suffered actual prejudice as a result of the Article 36 violation.

Based on Avena, Petitioner filed another habeas petition. While it was pending, the U. S. Supreme Court in Medellin v. Texas, 552 U. S. ___, 128 S. Ct. 1346 (U. S. 2008) ruled that neither Avena nor the Presidential Memorandum created binding federal law that would preempt state procedural limitations on successive habeas corpus petitions. The Supreme Court of California decides that Petitioner is precluded from filing a second habeas petition based on Convention violations.

“The Supreme Court issued its decision in Medellin on March 25, 2008. Upon finality, petitioner filed his traverse. In this case, the [California] Attorney General contends that the petition is subject to the procedural bar of successiveness. ‘It has long been the rule that absent a change in the applicable law or the facts, the court will not consider repeated applications for habeas corpus presenting claims previously rejected. [Cites. ] The court has also refused to consider newly presented grounds for relief which were known to the Petitioner at the time of a prior collateral attack on the judgment. [Cites. ] This rule was stated clearly in In re Conner [(1940)] 16 Cal. 2d 701, 705: ‘In this state a defendant is not permitted to try out his contentions piecemeal by successive proceedings attacking the validity of the judgment against him. ’ . . . ” [Slip op. 4]

The present Court also notes that: “[T]his is not a case where Petitioner’s notification claim has not been considered by this court on its merits. As already noted, petitioner’s first habeas corpus petition asserted a violation of his Vienna Convention rights by police and the trial court. We reviewed and considered that claim, including, of course, whether petitioner was prejudiced by any violation of his Article 36 rights. Thus, consistent with our own prior decisions, as well as that of the U. S. Supreme Court, we assumed for purposes of review that Petitioner had individually enforceable rights under Article 36. [Cites].”

“Specifically, we reviewed the declarations of the Mexican Consul General and the two witnesses whose presence the Mexican consulate would have obtained during his trial, Leonardo Armenta and Maximino Aviles, to determine whether petitioner was prejudiced either because he was denied the assistance the Mexican government could have provided him or denied the presence of these witnesses at his trial.”

“In so doing, we effectively complied with the ICJ’s directive, discussed in greater detail below, that the cases of the 51 Mexican nationals at issue in Avena be reviewed and reconsidered in light of the asserted violation of their Article 36 right to consular notification to determine whether, as a result of that violation, those individuals suffered ‘actual prejudice. ’(Avena, supra, 2004 I. C. J. at p. 59, ¶ 121.). We denied the petition on its merits. Thus, this court has already considered Petitioner’s article 36 claim without reference to any procedural bar.” [. . . ]

“In any event, Medellin has eviscerated Petitioner’s claim. The effect of Medellin is to restore the status quo ante that existed before Avena and the Presidential Memorandum, under which a state may reject a habeas corpus petition raising a Vienna Convention claim as procedurally barred.” [Slip op. 5]

Citation: In re Martinez, 46 Cal. 4th 945, 209 P. 3d 908 (Sup. Ct. 2009).

VIENNA CONSULAR CONVENTION

Reversing termination of parental rights of woman deported to Guatemala, Supreme Court of Nebraska holds, as matter of first impression, that compliance with notice to Guatemalan consular officials pursuant to Article 37 of Vienna Convention on Consular Relations is not jurisdictional prerequisite for state court power to decide best interests of her children in Nebraska

Maria L. is an undocumented immigrant from Guatemala. She has two (presumably American-born) children, Angelica (2004) and Daniel (1998. ) She had left her two older sons with relatives in Guatemala. Angelica required medical attention for the first time in February 2004 when she was one month old. She weighed only 3 pounds 9 ounces and suffered from dehydration, malnutrition and a urinary tract infection. In early April 2005, Maria took Angelica again to the medical center, this time for fever and breathing problems.

Maria, however, failed to bring Angelica back for a scheduled follow-up appointment. A social worker and a police officer went to Maria’s home and found Angelica in distress. The officer arrested Maria, and had Angelica and Daniel placed in protective custody with the Nebraska Department of Health and Human Services (DHHS).

A few weeks later, the federal government ordered Maria deported back to Guatemala. She then asked two Missionaries, William Vasey and Pastor Tomas DeJesus for help. Meanwhile, Nebraska approved a DHHS case plan; it required Maria to maintain a job, to take parenting classes, and to undergo a psychological evaluation.

Maria, however, allegedly failed to comply with the plan. In September 2006, DHHS moved in juvenile court to terminate Maria’s parental rights. One of the witnesses was Reverend Vasey, who testified that, in Guatemala, Maria had a residence, a job, and was a good provider for her two older sons. A DHHS representative testified that she had notified Guatemalan Consulates in the U. S., as well as the U.S. Embassy in Guatemala about this case.

The juvenile court rejected Maria’s argument that it lacked jurisdiction due to Nebraska’s violations of the Vienna Convention on Consular Relations, Article 37 (in force for U. S. Dec. 24, 1969 [ 21 U. S. T. 77, 102; T. I. A. S. 6820; 596 U. N. T. S. 261] [the Convention] to which both the U. S. and Guatemala are parties.

The pertinent language of Article 37 reads in part: “If the relevant information is available to the competent authorities of the receiving state, such authorities shall have the duty: . . . (b) To inform the competent consular post without delay of any case where the appointment of a guardian or trustee appears to be in the interests of a minor or other person lacking full capacity who is a national of the sending State.”

The court ordered the termination of Maria’s parental rights as in the children’s’ best interests. It found (1) that Maria had failed to provide basic medical care, and (2) that Maria’s fear of deportation was no excuse. Maria appealed. The Supreme Court of Nebraska reverses, ruling that there was not enough evidence to justify terminating Maria’s parental rights. The Court also points out that, as the Convention provides, the State should have involved the appropriate Guatemalan Consulate early on in the proceedings.

On the jurisdiction issue, Maria makes two claims. First, she argues that once the Immigration Service had deported her, the juvenile court lost any jurisdiction it might otherwise have had to determine her children’s custody. Secondly, she maintains that DHHS erred in neglecting to comply with the Convention because it did not timely communicate with a Guatemalan Consulate.

“Our court has never addressed whether State courts have jurisdiction over child custody disputes when a parent involuntarily faces deportation. However, case law from other jurisdictions indicates that issues concerning child custody fall within the province of state jurisdiction — not federal immigration jurisdiction—even when a parent faces involuntary deportation. . . . The whole subject of domestic relations, and particularly child custody problems, is generally considered a state law matter outside of federal jurisdiction. . . . ”

“We cannot conclude, simply because a party to this case faces deportation, that federal immigration laws preempt this State’s authority to decide matters involving child custody. We have stated that the jurisdiction of the State in juvenile adjudication cases arises out of the power every sovereignty possesses as parens patriae to every child within its borders to determine the status and custody that will best meet the child’s needs and wants. . . . As such, the juvenile court properly exercised jurisdiction over Angelica and Daniel. ”

“[. . . ] Whether compliance with the Convention is a jurisdictional prerequisite to parental termination actions involving foreign nationals is an issue of first impression for this court. Other jurisdictions have considered the same issue and have concluded that compliance with the Convention is not a jurisdictional prerequisite.”

“Other jurisdictions have concluded that state courts do not lose jurisdiction for failing to notify the foreign consulate as required by the Convention unless the complainant shows that he or she was prejudiced by such failure to notify. . . . Moreover, where there is actual notice, jurisdictions decline to invalidate child custody proceedings based on violations of the Convention. . . . ”

“In the present case, the record presents conflicting testimony regarding whether and when the Guatemalan consulate was notified about Maria’s case. [Lisa Hannah, a DHHS employee] testified that she [had] sent notification to the Guatemalan consulate of Colorado, but letters from the Guatemalan consulate claim that no such notice was ever received.”

“Based on Hannah’s testimony that telephone calls were made and faxes were sent to the Guatemalan consulate and the fact that counsel was later appointed to represent the Guatemalan consulate, the juvenile court concluded that the State had complied with the Convention. The juvenile court specifically noted that, regardless of whether compliance with the Convention was required, Hannah had made efforts to notify the Guatemalan consulate and did so in compliance with the Convention.”

“An appellate court does not reweigh the evidence or resolve conflicts in the evidence. . . . We consider that the juvenile court observed the witnesses and believed one version of the facts over the other. And assuming – without deciding – that compliance with the Convention is a jurisdictional prerequisite, we cannot say . . . that the juvenile court’s finding that the State complied with the Convention was erroneous. Thus, the juvenile court properly exercised jurisdiction. ” [Slip op. 1001-04]

“But as to the sufficiency of the evidence to terminate [Maria’s] parental rights, the Court acknowledges that Maria’s illegal immigration status may have affected [Maria’s] decision [whether or not it was safe] to seek medical treatment for her children. [T]he State [also] introduced testimonial evidence attempting to show that it would be in the children’s best interests to remain with their foster parents, because living in Guatemala would put them at a disadvantage compared to living in the U. S.”

“What we are dealing with here is a culture clash. Whether living in Guatemala or the U. S. is more comfortable for the children, however, is not determinative of the children’s best interests. . . . [T]he ‘best interests’ of the child standard does not require simply that a determination be made that one environment or set of circumstances is superior to another. . . .” [. . . ]

“The juvenile court expressed concern regarding the children’s extended placement outside of the home and for their need to stay in foster placement, ‘the only circumstances that they have ever known. ’ While we share the same concern regarding the children’s extended foster placement, we must protect Maria’s commanding constitutional interest. Maria did not forfeit her parental rights [merely] because she was deported. We note that this circumstance would not exist had the State allowed Maria to take the children with her to Guatemala.”

“It is especially clear that – as soon as Maria was released from custody and awaiting deportation – Daniel could have been safely returned to her. At oral arguments, when the State was asked why Daniel was placed in custody, the State’s only response was that it had received unsubstantiated reports of abuse. And as for Angelica, the record reveals that, while Maria was being detained by U. S. Immigration and Customs Enforcement, Angelica received the medical care she needed and had recovered before Maria was deported.”

“The government of Guatemala has the resources to monitor the children’s well being and Angelica’s rehabilitation, and, thus, the State has failed to prove that reunification while Maria continued with her case plan in Guatemala would endanger the children. . . . But so long as the parent is capable of providing for the children’s needs, what country the children will live in is not a controlling factor in determining [parental] reunification.” [Slip op. 1009-10]

Citation: In re Interest of Angelica L. , 277 Neb. 984, 767 N. W. 2d 74 (2009).