2011 International Law Update, Volume 17, Number 2 (April - June)

2011 International Law Update, Volume 17, Number 2 (April - June)

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

JURISDICTION (ALIEN TORT STATUTE)

D.C. Circuit concludes Alien Tort Statute confers no jurisdiction for civil action by alien alleging torture committed by the Palestinian Authority, a non‑state actor

Ali Shafi, a Palestinian, served as an agent and confidential informant for Israel for many years. In September of 2001, in the midst of the Intifada, Ali Shafi visited his mother in the West Bank and was arrested by Palestinian Authority (PA) [a.k.a. PLO] security officers, taken to a PA security service building, and subsequently beaten and tortured for several months. In March 2002, after a confession and half‑hour trial, the PA sentenced him to death. Awaiting transfer from a prison in Qalqilya to the site of his execution, Ali Shafi escaped when Israel invaded Qalqilya.

Seven years later, the Shafis initiated this action against the PA and PLO in district court, seeking damages for torture and physical and mental abuse under the Alien Tort Statute (ATS), 28 U.S.C. Sec. 1350. Appellees moved to dismiss for lack of subject matter jurisdiction (among other grounds), and the district court dismissed for failure to state a claim within the jurisdiction conferred by the ATS. 

The U.S. Court of Appeals for the D.C. Circuit affirms. The issue is whether the ATS provides jurisdiction in district court over a civil action by an alien for torture committed by non‑state actors such as the PLO.

In its analysis the D.C. Circuit emphasizes the narrow language of the ATS:

“The statute does no more than grant to the district courts ‘original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.’ 28 U.S.C. Sec. 1350. The statute creates no jurisdiction over any general actions for tort or otherwise against private actors under domestic law of this or any other nation.” [1091]

The D.C. Circuit repeatedly cites its decision in Tel Oren v. Libyan Arab Republic, 726 F.2d 774 (D.C. Cir. 1984). Although the defendant in that case was a nation state, the decision dealt with claims against the PLO. The Court notes that while differing in approach, members of the Tel Oren court “all provided support for the proposition that torture claims against non‑state actors were not within the jurisdictional grant of the ATS. Had nothing occurred between the announcement of that decision in 1984 and the entry of our decision today, circuit precedent would compel that we affirm the dismissal ordered by the district court. The relevant events between 1984 and today not only do not change our decision from the one entered in Tel Oren, but support a continuation of that precedent.” [1092]

The Appeals Court also relies heavily on Sosa v. Alvarez Machain, 542 U.S. 692 (2004), in which the Supreme Court considered the state of the common law and international law when the ATS was enacted in 1789 and concluded that Congress both had understood district courts would recognize private causes of action for certain torts in violation of the law of nations and had contemplated no examples of such torts beyond three primary offenses previously identified by Blackstone: (1) violation of safe conducts; (2) infringement of the rights of ambassadors; and (3) piracy. Id. [1092‑1093] 

The D.C. Circuit notes that while Sosa “left open the possibility that nothing ‘categorically preclude[s] federal courts from recognizing a claim under the laws of nations as an element of common law,’” its opinion cautioned that “‘there are good reasons for a restrained conception of the discretion a federal court should exercise in considering a new cause of action of this kind.’” [1093] These reasons were that the common law had changed since 1789 and judicial decisions were not “largely an exercise of discretion”; that for over half a century, the general practice had been to look for legislative guidance before exercising innovative authority over substantive law; that the decision to create a private right of action for violation of an international norm was better left to the legislature; that the potential foreign relations consequences of making violations of international norms actionable in U.S. federal court “should make courts particularly wary of impinging on the discretion of the Legislative and Executive Branches in managing foreign affairs”; and that Congress had not encouraged judicial creativity. [1093]

Adopting this approach, the D.C. Circuit states, “the proposition advanced by the appellants before us could open the doors of the federal courts to claims against non‑state actors anywhere in the world alleged to have cruelly treated any alien. To recognize such a sweeping claim would hardly be consistent with the standards of caution mandated by the Sosa Court.” [1094] The Court notes that, unlike Israel, the PLO was not a High Contracting Party to the Geneva Conventions, and the status of the PLO and nature of Israeli relations with the territory where the alleged torture took place were subjects of continuing dispute: “[t]hese claims fit well within the reasons provided by the Sosa Court for the cautious approach.” [1095]

Interestingly, the D.C. Circuit notes a logical contradiction in Tel Oren that leads it leave the door open to the possibility that claims recognizing non‑state actors could be recognized under the ATS:

“[T]hat piracy is among the core causes of action contemplated by Congress in enacting the ATS appears beyond dispute¼.Yet piracy in violation of the law of nations is by definition perpetrated by non‑state actors.¼A pirate is one who roves the sea in an armed vessel without any commission or passport from any prince or sovereign state, solely on his own authority, and for the purpose of seizing by force, and appropriating to himself without discrimination, every vessel he may meet.” [1096] Yet, the Court concludes:

 “That all said, it remains the case that applying the cautious approach dictated by Sosa, and consistent with the separate opinions¼in Tel Oren, we must hold that the district court properly dismissed this action.” Citing that case’s observation that “there was in 1984 an ‘insufficient consensus¼that torture by private actors violates international law,’ 542 U.S. at 732 n. 20,” the D.C. Circuit opines, “In 2011 it remains the case that appellants have shown us no such consensus.” [1096]

Citation: Shafi v. Palestinian Auth., 642 F.3d 1088, 395 U.S.App.D.C. 267 (D.C. Cir. 2011).

JURISDICTION

In case where personal guarantor of a debt left U.S. and was served in the UK, Seventh Circuit upholds default judgment where personal guarantor re‑appeared a day before the hearing in UK court whether enforce the U.S. judgment

Robert A. Hodges personally guaranteed $750,000 of debt that his company Laminate Kingdom, LLC (Laminate) owed to Relational, LLC (Relational). When Laminate went bankrupt, Relational sued Hodges on the guaranty, but by then Hodges had sold his Florida home and returned to his native United Kingdom leaving no forwarding information. Relational’s detective found an address for Hodges in the UK and effectuated personal service. To prove this, Relational submitted to the district court a return of service and two affidavits signed by a British process server, Karen Johns, who attested she had served a man who identified himself as Robert Hodges.

The district court accepted this showing and, when Hodges failed to appear, entered a default judgment for Relational. Relational then filed an action to enforce the judgment in a UK court. Although Hodges persistently refused to accept it, Relational finally accomplished service. The day before the hearing in that action was to begin, Hodges emerged, filing a Rule 60(b)(4) motion in Illinois district court to vacate the default judgment. He argued he had never been served, that Relational’s evidence was insufficient to prove otherwise, and that thus the judgment was void. 

A controversy ensued about whether Johns, the process server, who could not travel to the U.S. for an evidentiary hearing on Hodges’s motion, could testify telephonically from the UK; the court sustained Hodges objection. Relational secured an additional affidavit from Johns but this one lacked certification by an administrator of oaths._At hearing’s end, Relational submitted the supplemental affidavit signed by Johns. Hodges moved to strike the affidavit as an insufficient substitute for Johns’s live testimony, but the court denied the motion. The court denied Hodges’s motion to vacate and his motion for reconsideration on grounds the affidavit was legally defective. 

Hodges appealed, and the U.S. Court of Appeals for the Seventh Circuit affirms. The issue here is whether Hodges was, in fact, served in the UK.

The Appeals Court first deems the dispute over the supplemental affidavit irrelevant since the return of service and original affidavit Relational had offered were sufficient to discharge its prima facie burden:

“Relational’s original return of service and accompanying affidavit from Johns¼attested that Johns served an individual at 20 Margaret Grove on May 10, 2007, at 4 p.m. who identified himself as Robert Hodges. The supplemental affidavit simply added a physical description of Hodges, and while this detail may have been helpful, it was not required. See O’Brien, 998 F.2d at 1398. Hodges makes no argument that Johns’s original affidavit suffered from the same legal defects that afflict the supplemental affidavit.” [672‑673]

The Appeals Court then defers to the lower court’s credibility determinations that Hodges’s avoidance of creditors and refusal to be served, among other actions, conclusively resolved the case against Hodges. The Court then quickly dispatches Hodges’s “last‑ditch arguments” to avoid that result. Hodges, the Court notes, 

“contends that the district court’s rejection of Johns’s request to testify telephonically amounted to an order that she appear in person; her failure to appear, he argues, means that Relational violated the court’s order. He argues as well that this deprived him of the opportunity to cross‑examine Johns. Finally, he claims that the court should have credited his testimony because he was the only principal witness to testify in person.” [673] The Court pronounces these arguments unfounded: 

“First, Hodges appears to presuppose that the district court could compel Johns to appear. This is simply not the case; foreign nationals are beyond the court’s subpoena power. See 28 U.S.C. § 1783; United States v. Drogoul, 1 F.3d 1546, 1553 (11th Cir. 1993). Thus, the court could not ‘order’ Johns to do anything. Second, the absence of cross‑examination does not render Johns’s affidavit unworthy of credence. Hodges does not—and cannot—maintain that he has a right of confrontation in the circumstances of this case. Van Harken v. City of Chicago, 103 F.3d 1346, 1352 (7th Cir. 1997) (no absolute right of confrontation in civil cases, but confrontation is sometimes required to ensure due process). It is true that Hodges was the only principal witness to testify in person, but that does not mean the district judge was required to give his testimony more weight. Credibility is earned, and here, Hodges simply failed to persuade the court that he was telling the truth.” [673] 

Therefore, the district court was well within its discretion to deny Hodges’s Rule 60(b)(4) motion to vacate the default judgment. 

Citation: Relational, LLC v. Hodges, 627 F.3d 668 (7th Cir. 2010).

DISCOVERY

Federal Circuit holds German owner of patent portfolio cannot protect otherwise discoverable documents from disclosure under guise of international comity

IPCOM GmbH acquired a global telephony patent portfolio from another German company, Robert Bosch GmbH (Bosch). Several years later, HTC Corporation and HTC America, Inc. (HTC) filed a declaratory judgment action against IPCOM alleging the patents were invalid or not infringed. HTC served IPCOM with requests for production of documents relating to IPCOM’s evaluation, valuation, and purchase of the Bosch portfolio. IPCOM refused, asserting attorney‑client privilege. HTC moved to compel discovery, arguing any privilege was waived at the time of purchase.

The district court applied U.S. law in granting HTC’s motion. IPCOM then petitioned the U.S. Court of Appeals, Federal Circuit, for a writ of mandamus from the order. Because IPCOM failed to satisfy the “high burden for mandamus relief,” the Federal Circuit denies the petition. 

Under U.S. law, a party seeking a writ of mandamus bears the burden of proving it has no other means of attaining the relief desired, Mallard v. U.S. District Court, 490 U.S. 296, 309 (1989), and that the right to issuance of the writ is “clear and undisputable.” Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 35 (1980). In appropriate cases, a writ of mandamus may issue to “prevent the wrongful exposure of privileged communications.” In re Regents of the Univ. of Cat, 10, 1 F.3d 1386 (Fed. Cir. 1996).

On appeal IPCOM argues the district court erred in applying U.S. law rather than German law. However, the Court notes that for German law to apply, IPCOM “would first have to establish a conflict exists between German and U.S. law.” [Slip op. 3] The Court continues:

“While ‘[i]t is well known that the laws of some foreign countries present conflicts with...United States discovery demands,’ Cochran Consulting, Inc. v. Uwatec USA, Inc., 102 F.3d 1224, 1226 (Fed. Cir. 1996), despite bearing the burden of proof, IPCom has not clearly identified how or why the application of German law here would yield a different outcome¼.In fact, IPCom has presented no evidence on this issue, admitting that ‘the issue of a possible waiver under German law was never...briefed by any of the parties below’ (emphasis added).” [Slip op. 4]

Moreover, the Court notes, IPCOM cannot use German discovery laws to shield itself from producing documents that can be used to attack the validity or enforceability of its patents:

“If an inventor wants the protections afforded under the U.S. patent laws, that inventor must comply with all applicable rules and regulations to secure and maintain those rights. Notably, that includes the duty of candor and disclosure requirements during patent prosecution. To the extent that IPCom could lose its U.S. patent rights for failure to satisfy these obligations based on an assertion (if proven) of inequitable conduct, we agree that IPCom should not be able to shield itself from such a result by protecting otherwise discoverable documents from disclosure under the guise of international comity. See also Int’l Nutrition Co. v. Horphag Research Ltd., 257 F.3d 1324, 1329 (Fed. Cir. 2001) (stating that comity may not be extended when, as here, ‘doing so would be contrary to the policies or prejudicial to the interests of the United States’).” [Slip op. 4] 

Citation: In Re IPCOM GMBH & CO., No. 972 KG (Fed. Cir. 2011).

FOREIGN VESSELS

Where U.S. Coast Guard apprehends Ecuadorian fishing boat crew on suspicion of drug smuggling, Ninth Circuit concludes that failure to demonstrate reciprocity between the U.S. and Ecuador does not necessarily end inquiry whether Public Vessels Act provides waiver of sovereign immunity

Ecuadorians on a fishing boat were detected in international waters near the Galapagos Islands by the U.S. Coast Guard, which, suspecting involvement with drug smuggling, stopped and boarded the vessel. Tests performed on board yielded suspicious but inconclusive results and, with the consent of the Ecuadorian government, the Coast Guard towed the boat to Ecuador. Further tests conducted by the Ecuadorian government uncovered no contraband, and no charges were filed against the crew. Crew members then sued the U.S. in district court for over $5 million, alleging that U.S. agents unlawfully and negligently stopped, searched, arrested, detained and imprisoned the crew, seized the boat, and destroyed the cargo and fish owned by them, and that this resulted in unlawful imprisonment, humiliation, pain and suffering, destruction of personal property, loss of their catch and the use of the vessel, and public ridicule. The district court held the U.S. had not waived its sovereign immunity over the action and, accordingly, dismissed the case. Crew members appealed to the U.S. Court of Appeals for the Ninth Circuit.

 

As in the lower court, the issue on appeal is whether the U.S. waived sovereign immunity. As the Court notes, 

“It is elementary that the United States, as sovereign, is immune from suit save as it consents to be sued, and the terms of its consent to be sued in any court define that court’s jurisdiction to entertain the suit. A waiver of sovereign immunity cannot be implied but must be unequivocally expressed. United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 63 L.Ed.2d 607 (1980) (citation, alterations, and internal quotation marks omitted).” [1195] 

Of the several sources of an alleged waiver of sovereign immunity offered by Plaintiff‑Appellants, only three—the Public Vessels Act (PVA), 46 U.S.C. Sec. 31101; the Suits in Admiralty Act, 46 U.S.C. Sec. 30901; and the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346, 2671 et seq.—articulated an explicit waiver of sovereign immunity. The Court notes that “[b]ecause each of those three Acts provides a separate, explicit waiver of sovereign immunity, one might expect that any of the three waivers would suffice.” [1196] However, for historical reasons, the Court explains, “if a claim falls within the scope of the PVA, the plaintiff must meet the reciprocity requirement of the PVA, regardless of the type of claim the plaintiff asserts.” [1197] Thus, the Court focuses its analysis on the PVA.

Determining whether the PVA affords sovereign immunity in a particular instance is a two prong‑process: the claim must (1) fall within the scope of the Act and (2) meet the reciprocity requirement. The Court concludes that the claim falls within the scope of the Act. To do so, (a) the claim must come within the federal admiralty jurisdiction, and (b) damages must have been caused by a public vessel. To come under federal admiralty jurisdiction, the tort must have occurred on or over navigable waters (the locality requirement), and the actions giving rise to the tort claim must have borne a significant relationship to traditional maritime activity (the nexus requirement.) Precedent has dictated that the damages requirement be interpreted broadly, and here again, the Court finds the requirement easily met. [1197]

The Court does not, however, resolve whether the claim meets the reciprocity requirement, which states that “[a] national of a foreign country may not maintain a civil action under this chapter unless it appears to the satisfaction of the court in which the action is brought that the government of that country, in similar circumstances, allows nationals of the United States to sue in its courts._46 U.S.C. Sec. 31111.” [1119] While the Appeals Court agrees with the district court that the documents submitted by Plaintiff‑Appellants—an affidavit by an Ecuadorian lawyer and a translated copy of the Ecuadorian constitution—were insufficient to establish reciprocity, it also finds that 

“The failure of Plaintiffs’ documents to demonstrate reciprocity does not necessarily end the inquiry. Under Federal Rule of Civil Procedure 44.1, ‘[i]n determining foreign law, the court may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence¼.[C]ourts may ascertain foreign law through numerous means, including through the court’s ‘own research.’” [1200]

Because the district court apparently did not recognize that, in its discretion, it could inquire further into the content of Ecuadorian law, the Ninth Circuit affirms in part, vacates, and remands for reconsideration.

Citation: Tobar v. U.S., 639 F.3d 1191 (9th Cir. 2011).

JURISDICTION

Court of Justice of the European Union holds resolution of divergence of wording in different‑language versions of Article 22(2) of EC Regulation 44/2001 requires strict interpretation to ensure scope of jurisdiction stays within resolution’s main objectives  

On July 19, 2007, JP Morgan Chase Bank NA (JPM), an American investment bank with branches and subsidiaries in Germany and the United Kingdom, and Berliner Verkehrsbetriebe (BVG), a transportation provider headquartered in Berlin, Germany, concluded via a trade confirmation an “Independent Collateral Enhancement Transaction” involving a Swap Contract that contained a clause conferring jurisdiction on the English courts. Under the terms of the Swap Contract, BVG agreed to pay JPM up to $220 million in the event of default on payment by certain third‑party companies. 

After JPM brought an action before the English courts designed essentially to enforce the contract on the basis of a clause conferring jurisdiction, BVG brought a parallel action asking the German courts, inter alia, to declare the same contract void because its subject matter was ultra vires. Ultimately the Court of Appeal of England made a reference for a preliminary ruling by the Court of Justice of the European Union (Third Chamber). 

The issue the Court of Justice addresses is whether the scope of Article 22(2) of EC Regulation 44/2001 extends to “proceedings in which a company or legal person objects, with regard to a claim made against it stemming from a legal transaction, that decisions of its organs which led to the conclusion of the legal transaction are ineffective as a result of infringement of its statutes.” [613] The issue was complicated by a divergence in the wording of various language versions of Article 22(2). As the Court of Justice describes it, 

“According to some of the language versions, the courts where a company or other legal person or an association of natural or legal persons has its seat have exclusive jurisdiction: ‘in the matter of’ the validity of its constitution, its nullity or its dissolution or of the validity of the decisions of its organs. By contrast, other language versions provide for such jurisdiction where proceedings have such a question as their ‘object’ or ‘subject‑matter’. The second of those forms of wording suggests, unlike the first, that only proceedings in which the validity of a company’s constitution or of a decision of a company’s organs is raised as the primary issue are covered by that provision of Regulation 44/2001.” [614‑615]

The Court notes that it had been well‑established case law that the various‑language versions of a text of EU law must be given a uniform interpretation, so that in the case of a divergence among language versions, the provision in question must be interpreted “by reference to the purpose and general scheme of the rules of which it forms a part.” [615] In the case before it, the Court cautions, 

“[I]t is to be recalled that the jurisdiction provided for in art.2 of Regulation 44/2001, namely that the courts of the Member State in which the defendant is domiciled are to have jurisdiction, constitutes the general rule. It is only by way of derogation from that general rule that the regulation provides for special rules of jurisdiction for cases¼in which the defendant may or must, depending on the case, be sued in the courts of another Member State.” [615]

The Court holds that insofar as Article 22(2) constitutes an exception to the general rule, it must not be given an interpretation broader than is required by its objective, and that a strict interpretation of the article “is particularly necessary because the jurisdiction rule which it lays down is exclusive, so that its application would deny the parties to a contract all autonomy to choose another forum.” [615] The Court continues:

“If all disputes relating to a decision by an organ of a company were to come within the scope of art.22(2)¼that would in reality mean that legal actions brought against a company—whether in matters relating to a contract, or to tort or delict, or any other matter—could almost always come within the jurisdiction of the courts of the Member State in which the company has it seat¼. It would be sufficient for a company to plead as a preliminary issue that the decisions of its organs that led to the conclusion of a contract or to the performance of an allegedly harmful act are invalid in order for exclusive jurisdiction to be unilaterally conferred upon the courts where it has its seat.” [616]

Further, because one of the aims of the regulation is to “seek to attain rules of jurisdiction that are highly predictable, and secondly, to the principle of legal certainty” [616], the application of a jurisdictional rule based on the nature of the dispute would shift depending on “whether a preliminary issue, capable of being raised at any time by one of the parties, exists, on the ground that this would alter the nature of the dispute.” [616] Such a broad interpretation of Article 22(2), the Court reasons, “would extend the scope of that provision beyond what is required by the objectives pursued by it.” [617]

The Court deems the divergent versions of Article 22(2) must be resolved by interpreting that provision as covering only proceedings whose principal subject matter comprises “the validity of the constitution, the nullity or the dissolution of the company, legal person or association or the validity of the decisions of its organs.” [617] As such, Article 22(2) must be interpreted as not applying to the current proceedings.

Citation: Berliner Verkehrsbetriebe (BVG) v JPMorgan Chase Bank NA, [2011] I.L.Pr. 29 (Court of Justice of the European Union [Third Chamber] 2011).

JURISDICTION

Despite metal‑shearing machine accident occurring in New Jersey and extensive business dealings in the U.S., where foreign company’s only contact in state was presence of the one machine, U.S. Supreme Court denies jurisdiction as company’s actions, not expectations, indicate less than purposeful availment of privilege of conducting business in state

Robert Nicastro seriously injured his hand while using a metal‑shearing machine manufactured by J. McIntyre Machinery, Ltd. (J. McIntyre). The accident occurred in New Jersey, but the machine was manufactured in England, where J. McIntyre was incorporated and operated. Nicastro filed suit in New Jersey state court, where the accident occurred, but J. McIntyre sought to dismiss the suit for want of personal jurisdiction.

The New Jersey Supreme Court concluded that jurisdiction was proper because the injury occurred in New Jersey; because J. McIntyre knew or reasonably should have known that its products were distributed through a nationwide distribution system that might lead to those products being sold in any of the 50 states; and because it took no reasonable steps to prevent the distribution of its products in the state. McIntyre appeals; the U.S. Supreme Court reverses.

The issue here is whether a state court can exercise jurisdiction over an entity absent from the state at the time of injury and of suit and whose activities in the state reveal no intent to invoke or benefit from the protection of its laws.

The Court notes that_“[t]he rules and standards for determining when a State does or does not have jurisdiction over an absent party have been unclear because of decades‑old questions left open in Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U.S. 102 (1987).” [Slip op. 5] In that case, the Court states, “Justice Brennan’s concurrence, advocating a rule based on general notions of fairness and foreseeability, is inconsistent with the premises of lawful judicial power. This Court’s precedents make clear that it is the defendant’s actions, not his expectations, that empower a State’s courts to subject him to judgment.” [Slip op. 12] If foreseeability were the controlling criterion, the Court adds, the owner of a small Florida farm who sold crops to a large nearby distributor that then might distribute them to grocers across the country could be sued in Alaska or any number of other States’ courts without ever leaving town.” [Slip op. 14]

“As a general rule, the exercise of judicial power is not lawful unless the defendant ‘purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.’ Hanson v. Denckla, 357 U.S. 235, 253 (1958).” [Slip op. 6] 

In this case, the Court explains, defendant’s actions entailed directing marketing and sales efforts at the United States: “Recall that respondent’s claim of jurisdiction centers on three facts: The distributor agreed to sell J. McIntyre’s machines in the United States; J. McIntyre officials attended trade shows in several States but not in New Jersey; and up to four machines ended up in New Jersey. The British manufacturer had no office in New Jersey; it neither paid taxes nor owned property there; and it neither advertised in, nor sent any employees to, the State. Indeed, after discovery the trial court found that the ‘defendant does not have a single contact with New Jersey short of the machine in question ending up in this state.’ App. to Pet. for Cert. 130a. These facts may reveal an intent to serve the U.S. market, but they do not show that J. McIntyre purposefully availed itself of the New Jersey market.”¼“[I]t is petitioner’s purposeful contacts with New Jersey, not with the United States, that alone are relevant.” [Slip op. 15]

Citation: J. McIntyre Mach., Ltd. v. Nicastro, No. 09–1343 (June 27, 2011).

JURISDICTION (ALIEN TORT STATUTE)

Ninth Circuit concludes that “requisite contacts” with forum by, and fair and reasonable exercise of personal jurisdiction over, subsidiary of DaimlerChrysler AG in California confer general jurisdiction on parent maintaining dual operational headquarters in Stuttgart, Germany, and Michigan

Collaborating with Argentinian military and police forces, the Gonzalez Catan plant of Mercedes Benz Argentina (MBA), one of the subsidiaries of DaimlerChrysler Aktiengesellschaft’s (DCAG’s) predecessor‑in‑interest, effectively quelled strikes by plant workers that MBA viewed as union agitators by labeling them as subversives, passing that information on to state security forces, stationing military and police forces within the plant, opening the plant to periodic raids by those forces, installing the police station chief behind much of Argentina’s reign of terror as the chief of security, and providing him legal representation when accused of human rights abuses. MBA knew the result of the collaboration would be the kidnapping, torture, detention, and murder of those workers.

 Twenty‑two victims or their close relatives (Plaintiffs) brought suit against DCAG in the District Court for the Northern District of California under the Alien Tort Statute (ATS), 28 U.S.C. § 1350, and the Torture Victim Protection Act of 1991 (TVPA), 106 Stat. 73, note following 28 U.S.C. § 1350. They alleged MBA had collaborated with Argentinian security forces to kidnap, detain, torture, and kill them and/or their relatives during Argentina’s “Dirty War.” 

After attempting to serve process at one of DCAG’s headquarters in Stuttgart, Germany,  Plaintiffs attempted to serve DCAG in Michigan. DCAG moved to quash service and to dismiss the case for lack of personal jurisdiction; however, after Plaintiffs submitted evidence that DCAG maintained dual operational headquarters in Michigan and Stuttgart, Germany, DCAG withdrew its motion. Because the parties did not dispute MBUSA was subject to personal jurisdiction by virtue of its extensive contacts in California, the only issue was whether the district court’s exercise of personal jurisdiction over MBUSA’s parent, DCAG, comported with due process. Without conducting an evidentiary hearing, but after allowing limited jurisdictional discovery, the district court granted DCAG’s motion to dismiss for lack of personal jurisdiction. The Court based the decision on its conclusion that MBUSA was not an agent of DCAG and that consequently DCAG lacked the requisite contacts with the forum state.

Plaintiffs appealed to the U.S. Court of Appeals for the Ninth Circuit, which reverses and remands because it finds MBUSA did serve as DCAG’s agent and the exercise of personal jurisdiction was, in fact, fair and reasonable. Because the district court had held no evidentiary hearings, the Court of Appeals notes, Plaintiffs had only to demonstrate “facts that if true would support jurisdiction over the defendant.” [913] 

Deeming the “specific” brand of personal jurisdiction irrelevant here, the Court conducted the two‑prong test for “general” jurisdiction in which (Plaintiffs demonstrate that) the DCAG possessed requisite contacts with the forum and the exercise of that jurisdiction is fair and reasonable (with the burden on Defendant DCAG to show the exercise is unreasonable). The Appeals Court explains:

“In determining the requisite contacts of a defendant, we look to whether its activities in the forum are ‘substantial’ or ‘continuous and systematic,’ even if the cause of action is unrelated to those activities¼.In other words, we ask whether a defendant’s ‘continuous corporate operations within [the] state are...so substantial and of such a nature as to justify suit against the defendant on causes of action arising from dealings entirely distinct from those activities¼.Here, there is no doubt that MBUSA has the requisite contacts. The question is whether MBUSA’s extensive contacts with California warrant the exercise of general jurisdiction over DCAG. Under the controlling law, if one of two separate tests is satisfied, we may find the necessary contacts to support the exercise of personal jurisdiction over a foreign parent company by virtue of its relationship to a subsidiary that has continual operations in the forum.” [920] 

The Court states that the relevant test here is the two‑pronged “agency test” and that—as evidenced by the General Distributor Agreement, which the Court says “governs” the relationship between parent and subsidiary—Plaintiffs have shown that (1) the subsidiary “performs services that are sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation’s own officials would undertake to perform substantially similar services” [920] and (2) DCAG “has the right to control nearly all aspects of MBUSA’s operations.” [924] 

Having covered the “requisite contacts” requirement, the Court then holds Plaintiffs have also met the requirement that the exercise of jurisdiction be “fair and reasonable” based on a consideration of seven factors: “the extent of purposeful interjection; the burden on the defendant; the extent of conflict with sovereignty of the defendant’s state; the forum state’s interest in adjudicating the suit; the most efficient judicial resolution of the dispute; the convenience and effectiveness of relief for the plaintiff; and the existence of an alternative forum.” [925] The Court cites in support of its analysis a Second Circuit decision, Wiwa v. Royal Dutch Petroleum Company, 226 F.3d 88 (2d Cir. 2000), which weighed the seven factors to conclude that jurisdiction over the defendant was fair and reasonable—on the basis of a far less persuasive set of facts than those presented in the current case. [929‑930]

Citation: Bauman v. DaimlerChrysler Corp., 644 F.3d 909 (9th Cir. 2011).

JURISDICTION

U.S. Supreme Court holds in‑state contacts of foreign manufacturer Goodyear France, whose tires are implicated in fatal accident abroad, insufficiently ‘continuous and systematic’ to justify exercise of general jurisdiction, despite small percentage of its tires distributed within state by other Goodyear USA affiliates 

In April 2004, a bus accident fatally injured two 13‑year‑old passengers, Julian Brown and Matthew Helms, on a road outside Paris, France. As administrators of the boys’ estates, the parents filed a wrongful death suit in Superior Court in North Carolina. Attributing the accident to a tire that failed when its plies separated, the parents alleged negligence in the “design, construction, testing, and inspection” of the tire. 

Among the defendants was Goodyear Dunlop Tires France, SA (Goodyear France), an indirect subsidiary of the Ohio corporation Goodyear, USA. Goodyear France manufactured tires primarily for sale in European and Asian markets. It was not registered to do business in North Carolina; had no place of business, employees, or bank accounts in North Carolina; did not design, manufacture, or advertise their products in North Carolina; and did not solicit business in North Carolina or themselves sell or ship tires to North Carolina customers. Yet, a small percentage of the subsidiary’s tires were distributed within North Carolina by other Goodyear USA affiliates. The type of tire involved in the accident was never distributed in the state. 

Although Goodyear France maintained North Carolina lacked jurisdiction over it, the trial court denied its motion to dismiss the claims against it. The subsidiary appealed the ruling, but the North Carolina Court of Appeals affirmed. 

Addressing the threshold issue—are foreign subsidiaries of a U.S. parent corporation amenable to suit in state court on claims unrelated to any activity of the subsidiaries in the forum state?—the U.S. Supreme Court reverses because insufficient contacts existed to warrant North Carolina’s exercise of jurisdiction over Goodyear France.

The Supreme Court discusses the appeals court’s process at length. Acknowledging contacts with North Carolina insufficient to invoke “special jurisdiction” over the subsidiary, the appeals court confined its analysis to “general jurisdiction,” which can be inferred when the defendant’s contacts with the forum state are so “continuous and systematic” as to render them essentially at home there. “To justify the exercise of general jurisdiction over petitioners,” the Supreme Court states, “the North Carolina courts relied on the petitioners’ placement of their tires in the ‘stream of commerce.’” [Slip op.12] However, “the North Carolina court’s stream‑of‑commerce analysis elided the essential difference between case‑specific and all‑purpose (general) jurisdiction. Flow of a manufacturer’s products into the forum, we have explained, may bolster an affiliation germane to specific jurisdiction¼.But ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant” (citations omitted). [Slip op. 13‑14]

The Court distinguishes the present case from the textbook example of a proper exercise of general jurisdiction—the 1952 Perkins v. Benguet Consol. Mining Co., where the corporate defendant maintained its “principal, if temporary, place of business” in the forum state. On the other hand, the Supreme Court likens the current case to Helicopteros Nacionales de Colombia, S. A. v. Hall, 466 U.S. 408 (1984), where the defendant “Colombian corporation had no place of business in Texas and was not licensed to do business there. Basically, [the company’s] contacts with Texas consisted of sending its chief executive officer to Houston for a contract‑negotiation session; accepting into its New York bank account checks drawn on a Houston bank; purchasing helicopters, equipment, and training services from [a Texas enterprise] for substantial sums; and sending personnel to [Texas] for training¼.These links to Texas, we determined, did not ‘constitute the kind of continuous and systematic general business contacts...found to exist in Perkins,’ and were insufficient to support the exercise of jurisdiction over a claim that neither ‘ar[o]se out of¼no[r] related to’ the defendant’s activities in Texas” (citations and internal quotes omitted). [Slip op. 14]

“We see no reason to differentiate from the ties to Texas held insufficient in Helicopteros, the sales of petitioners’ tires sporadically made in North Carolina through intermediaries. Under the sprawling view of general jurisdiction urged by respondents and embraced by the North Carolina Court of Appeals, any substantial manufacturer or seller of goods would be amenable to suit, on any claim for relief, wherever its products are distributed. But cf. World‑Wide Volkswagen, 444 U.S., at 296 (every seller of chattels does not, by virtue of the sale, ‘appoint the chattel his agent for service of process’).” [Slip op. 16]

Citation: Goodyear Dunlop Tires Operations v. Brown, No. 10‑76 (2011).

PREEMPTION

When indirect purchasers of airline tickets allege prices violate California antitrust and consumer protection laws, Ninth Circuit concludes Airline Deregulation Act of 1978 preempts state regulation of foreign air carriers

As part of a larger case, Soon Ja Chun, Bernard Jung Kim, and Elizabeth Bahn (Plaintiffs) filed an amended complaint on behalf of indirect purchasers of Korean Air and Asiana airline tickets alleging the prices they paid were unlawfully excessive in violation of both state and federal antitrust and consumer protection laws. Defendants moved to dismiss the complaint, arguing, among other things, that the Airline Deregulation Act of 1978 (ADA), 49 U.S.C. § 41713, preempted Plaintiffs’ state law claims. The district court granted the motion and dismissed.

Plaintiffs appealed to the U.S. Court of Appeals for the Ninth Circuit, arguing that federal law did not preempt state regulation of foreign air carriers. In a matter of first impression, the Court rejects their argument, drawing on the language, purpose, and legislative history of the statute’s preemption provision; case and treaty law; and public policy. 

The ADA provides that a “[s]tate¼may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation under this subpart.” 49 U.S.C. § 41713(b)(1). Plaintiffs contended the terms “air carrier” and “foreign air carrier” referred to different entities, and that Congress consistently employed those terms for distinct uses. Because 51 separate legal provisions employed both terms, they argued, Congress’s use of only the term “air carrier” in the preemption provision meant that it did not intend to preempt state regulation of foreign air carriers. The Court notes that in the ADA, however,

“‘[A]ir carrier’ is sometimes used to refer generally to both domestic and foreign airlines. For example, 49 U.S.C. Sec. 44901(I) refers to ‘an air carrier providing air transportation under a certificate...or a permit.’ Only a domestic ‘air carrier’ provides air transportation under a certificate, and only a ‘foreign air carrier’ provides air transportation under a permit¼.Thus, the term ‘air carrier’ in this context refers to both a domestic ‘air carrier’ and a ‘foreign air carrier’” (citations omitted). [692] 

To aid in construing the admittedly ambiguous term, the Court also looks to its context, concluding that Congress intended that the term apply to all carriers, not just domestic ones. Where the preemption provision prohibits state regulation of “an air carrier that may provide air transportation under this subpart, 49 U.S.C. Sec. 41713(b)(1),” the Court notes that the referenced subpart comprises provisions regulating both domestic and foreign air carriers: “A sensible reading of the preemption provision implies that ‘air carrier’ was intended to have its broader and ordinary meaning in this section of the statute” (citations omitted). [693]

Similarly, the Ninth Circuit finds support in the purpose of the ADA’s preemption provision, which, it states, is to “‘ensure that the [s]tates would not undo federal deregulation with regulation of their own.’ Morales v. Trans World Airlines, Inc., 504 U.S. 374, 378, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992). ‘In addition to protecting consumers, federal regulation insures a uniform system of regulation and preempts regulation by the states’ in a field where state‑based variations ‘would be confusing and burdensome to airline passengers, as well as to the airlines.’¼This purpose would be undermined if states could regulate foreign air carriers.” [694]

The Court also marshals the legislative history, noting that although the originally enacted law prohibited state regulation of carriers with authority to provide interstate air transportation [suggesting only domestic carriers], the Civil Aeronautics Board Sunset Act of 1984 (Sunset Act), Pub.L. No. 98‑443, 98 Stat. 1703 (1984), deleted the word “interstate” so that preemption extended to “any air carrier having authority...to provide air transportation”—including foreign air carriers. [695]

Surveying the case law, the Court states that “[a]lthough few courts have explicitly discussed the issue raised by Plaintiffs, numerous courts, including the Supreme Court, have applied the provision to foreign carriers without reservation.” [695]

The nature of treaty obligations also suggests a broad construction of the term “air carrier,” the Court states, citing the “longstanding principle that statutes should be construed in accordance with international law.” [696] Discriminating against foreign air carriers in favor of domestic ones would be contrary to that mandate; the Court cites the Convention on International Civil Aviation, art. 11, Dec. 7, 1944, 61 Stat. 1180, 15 U.N.T.S. 295, which provides for application of laws and regulations “without distinction as to nationality” of airlines of signatory states.

On a pragmatic level, “[i]f the preemption provision only sheltered domestic air carriers, it would be more difficult for foreign carriers to enter the U.S. market for international flights. This added burden would be to the detriment of U.S. consumers, who benefit from price competition between as many carriers as possible. Moreover, discriminating against foreign carriers would be contrary to our country’s general preference for free trade¼.If state regulation makes it harder for foreign air carriers to compete with domestic carriers, U.S.‑based airlines might soon encounter additional, retaliatory barriers when they try to sell tickets abroad.” [696]

The Court affirms the district court’s dismissal of Plaintiffs’ state law claims.

Citation: In Re Korean Air Lines Co., 642 F.3d 685 (9th Cir. 2011).

SOVEREIGN IMMUNITY

In case of American contractors slain in Iraq, D.C. Circuit concludes that conversion of a state claim under Section 1605(a)(7) of Foreign Sovereign Immunities Act to a federal claim allowing punitive damages under Section 1083(a) of National Defense Authorization Act for FY 2008 does not create new claim requiring new service of process  

American contractors Olin Armstrong and Jack Hensley provided technical and operational assistance to the U.S. military in Iraq, where they were kidnapped, held hostage, and ultimately beheaded. The executioner, Mus’ab al‑Zarqawi, and his terrorist organization, known as al‑Qaeda in Iraq, claimed responsibility. 

The two contractors’ families brought state law claims in district court alleging the Syrian Arab Republic (Syria) provided material support to both Zarqawi and al‑Qaeda, facilitating the deaths of the two men. The families relied on the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. § 1602 et seq. While the Act gives foreign states immunity from the jurisdiction of U.S. courts, its Sections 1605 through 1607 waive this immunity when, inter alia, the foreign state provides material support for hostage taking or is designated a state sponsor of terrorism. Syria had been designated a state sponsor of terrorism since 1979. Syria failed to respond, and the court entered a default judgment for the families. 

Before the district court issued its opinion, the U.S. president signed the National Defense Authorization Act for Fiscal Year 2008 (NDAA) into law; its Section 1083(a) amended the FSIA by repealing Section 1605(a)(7) and adding a new provision, Section 1605A, in its place. Unlike its predecessor, Section 1605A created a federal rule of decision against foreign states and provided for punitive damages; the new section could also apply to pending cases initially brought under Section 1605(a)(7). 

The families converted their claim to proceed under Section 1605A, arguing their federal claim for relief was effectively the same as the claim previously served on Syria. The district court granted the motion, holding new service of process was unnecessary. The court entered a default judgment in favor of the families and awarded damages of over $400 million.

Syria appealed to the U.S. Court of Appeals for the D.C. Circuit, arguing the families failed to effectuate service of process and the district court lacked jurisdiction. Rather than remand the case, the D.C. Circuit placed Syria’s appeal in abeyance pending the lower court’s decision whether it intended to vacate the default judgment or otherwise grant relief. Thereafter, Syria filed a Rule 60(b) motion seeking to vacate the judgment, citing several procedural, constitutional, and jurisdictional defects. Interpreting its jurisdiction as limited under Hoai v. Vo, 935 F.2d 308 (D.C. Cir. 1991), the district court denied Syria’s motion but indicated it would vacate the conversion order and amend its default judgment order accordingly. Relying on Rule 5(a)(2) of the Federal Rules of Civil Procedure, the lower court reasoned that the families’ Section 1605A claim had presented a new claim for relief requiring new service of process, which the families had not provided.

Citing the plain language of the NDAA, the Appeals Court resolves with a resounding ‘no’ the key issue on appeal: whether or not claims converted under NDAA Section 1083 constitute new claims requiring new service of process. The Court gives four rationales for its decision to affirm the lower court’s denial of Syria’s Rule 60(b) motion:

“First, new claims must be asserted in pleadings. See Fed.R.Civ.P. 8(a). But section 1083 allows for conversion ‘on motion made.’ A motion is not a pleading. Indeed, Rule 7(b) describes a ‘motion’ as ‘a request for an order’ and Rule 7(a) does not include a ‘motion’ in its list of documents considered ‘pleadings.’ See Fed.R.Civ.P. 7(a) (listing documents considered pleadings).” [5]

“Second, the statute requires a converted action to ‘be given effect as if the action had originally been filed under section 1605(a)(7).’ NDAA Sec. 1083(c)(2)(A). Treating a converted action as a new claim would undermine this statutory language because it would treat the claim as if it were originally filed under section 1605A, not section 1605(a)(7).” [5‑6]

“Third, section 1083 allows for conversion ‘on appeal.’ But pleadings cannot be amended on appeal. See Fed.R.Civ.P. 15(a). Thus, the statutory language suggests the converted claim is not a ‘new claim’ requiring an amended pleading.” [6]

“Finally, section 1605A changes the applicable rule of decision, it does not create a new cause of action. Section 1605A provides for a federal cause of action, whereas section 1605(a)(7) relied upon state law claims. Both sound in tort, however. And both claims arise from the same underlying acts of terrorism. It is therefore the applicable rule of decision that is new when an action is converted under section 1083, not the claim itself.” [6]

The Court notes that the district court’s reliance on Rule 5(a)(2) was misplaced given the FSIA’s specific statutory provision regarding service of process.

Citation: Gates v. Syrian Arab Republic, 646 F.3d 1 (D.C. Cir. 2011).

SUBJECT MATTER JURISDICTION

Alien Tort Statute provides no jurisdiction against corporations under customary international law, Second Circuit holds  

Various Dutch, British, and Nigerian corporations, through the subsidiary Shell Petroleum Development Company of Nigeria, Ltd. (SPDC), had been engaged in oil exploration and production in the Ogoni region of Nigeria since 1958. In response, residents of the region organized to protest the environmental impacts and, in 2004, filed a putative class action complaint under the Alien Tort Statute, 28 U.S.C. § 1350 (ATS). The complaint alleged SPDC had aided and abetted the Nigerian government in suppressing the resistance by committing violations of the law of nations, including extrajudicial killing; crimes against humanity; torture or cruel, inhuman, and degrading treatment; arbitrary arrest and detention; violation of the rights to life, liberty, security, and association; forced exile; and property destruction. 

The U.S. District Court for the Southern District of New York dismissed the claims against corporate defendants in part and certified the entire order for interlocutory appeal. The parties cross‑appealed. The U.S. Court of Appeals for the Second Circuit dismisses the complaint for lack of subject matter jurisdiction.

The issue is whether the ATS provides jurisdiction against corporations under customary international law. Quoting its own Filartiga v. Pena‑Irala, 630 F.2d 876, 890 (2d Cir. 1980), the Second Circuit notes that the statute provides jurisdiction over “(1) tort actions, (2) brought by aliens (only), (3) for violations of the law of nations (also called ‘customary international law’ FN3) including, as a general matter, war crimes and crimes against humanity—crimes in which the perpetrator can be called ‘hostis humani generis, an enemy of all mankind.’” [149]. Although precedent has held that the ATS holds sway over natural persons and even over individual members of a corporation, it is a case of first impression whether the statute can subject a juridical person such as a corporation to its jurisdiction. 

The Second Circuit takes a two‑step approach in reaching its decision, considering, first, whether international or domestic law governs the case and, second, whether corporations are subject to liability for violations of customary international law. Based on international law, the Supreme Court in Sosa v. Alvarez‑Machain, 542 U.S. 692 (2004), and its own precedents that international law does govern, the Court addresses the first issue:

“Looking to international law, we find a jurisprudence, first set forth in Nuremburg and repeated by every international tribunal of which we are aware, that offenses against the law of nations (i.e., customary international law) for violations of human rights can be charged against States and against individual men and women but not against juridical persons such as corporations. As a result, although customary international law has sometimes extended the scope of liability for a violation of a given norm to individuals, it has never extended the scope of liability to a corporation.” [120]

Sosa required courts to look to international law to determine jurisdiction over ATS claims. The Second Circuit notes that this had been its own approach, as set forth in the Filartiga case. Further, in its own circuit, the Court had held that aiding and abetting was as much a violation of the relevant international norm as was the act aided and abetted: while under domestic law, there is no general presumption that the plaintiff may also sue aiders and abettors, under the law of nations, there is. 

Analyzing the second issue, the Court then considers “what the sources of international law reveal with respect to the existence of a norm of corporate liability under customary international law,” [131] finding “those sources lead inescapably to the conclusion that the customary international law of human rights has not to date recognized liability for corporations that violate its norms.” [166] Neither at the Nuremburg Trials nor at international tribunals since have corporations been held liable. And although certain treaties “suggest a trend towards imposing corporate liability in some special contexts, no trend is detectable outside such narrow applications in specialized treaties.” [141] Thus: 

“[I]mposing liability on corporations for violations of customary international law has not attained a discernible, much less universal, acceptance among nations of the world in their relations inter se. Because corporate liability is not recognized as a ‘specific, universal, and obligatory’ norm, see Sosa, 542 U.S. at 732, 124 S.Ct. 2739 (internal quotation marks omitted), it is not a rule of customary international law that we may apply under the ATS.” [145]

The Court cautions that this is not a case of sovereign immunity. A formulation that asks whether corporations are “immune” from suit under the ATS “improperly assumes that there is a norm imposing liability in the first place.” [120]

Citation: Kiobel v Royal Dutch Petroleum Co., 621 F.3d 111 (2d Cir. 2010).

SOVEREIGN IMMUNITY

In reviewing decision favoring Canadian instrumentality that breached contract with U.S. company, D.C. Circuit reverses, holding under Foreign Sovereign Immunities Act, lack of intervening event provides “direct effect” of breach sufficient to allow jurisdiction

In 2008 Cruise Connections (CC), a U.S. corporation based in Winston‑Salem, N.C., signed a contract with the Royal Canadian Mounted Police (RCMP) under which CC would dock in Vancouver three cruise ships that RCMP would use to house security staff during the 2010 Olympic Winter Games. The contract required CC to subcontract with two U.S.‑based cruise lines, Holland America and Royal Caribbean, to provide the necessary ships. For this service, RCMP contracted to pay CC just over $54 million (Canadian).

CC then entered into “Charter Party Agreements” with Holland America and Royal Caribbean to provide three ships for approximately $39 million (U.S.). Because the ships would remain in Vancouver for several weeks, the two companies demanded assurances that they would incur no liability for Canadian corporate income and payroll taxes. Although it originally gave such assurances, RCMP later disavowed responsibility with regard to the taxes just as the two subcontractors were about to sign the Charter Party Agreements with CC. 

The cruise lines balked, leaving CC unable to deliver signed Charter Party Agreements by the required date. When RCMP terminated the contract with CC, the corporation sued RCMP in U.S. District Court for the District of Columbia alleging breach of contract and unfair trade practices. 

Under the Foreign Sovereign Immunities Act (FSIA), RCMP, as an “agency or instrumentality” of Canada, generally would enjoy sovereign immunity from suit, unless that immunity is abrogated by the Act’s Commercial Activities exception, which applies “in any case...in which the action is based...upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States” (italics added). Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. §§ 1602‑11,Id. § 1605(a)(2). CC argued that this exception applied. RCMP, in turn, argued that the alleged breach had “no direct effect in the United States” and moved to dismiss for lack of jurisdiction. 

CC responded with two arguments contending RCMP’s actions caused two direct effects in the U.S. First, the contract required RCMP to pay via wire transfer to a U.S. bank and RCMP’s failure to pay qualified as a direct effect in the U.S. Second, RCMP’s cancellation caused a direct effect in the U.S. because it resulted in the loss of U.S. business to CC and the cruise lines.

The district court rejected both arguments. It held that RCMP’s failure to pay did not constitute a direct effect because the parties had never agreed that RCMP would pay in the U.S. As to the loss of business, the court held that CC’s inability to perform its contractual obligations to the third parties constituted an intervening element between RCMP’s breach and the broken third‑party agreements, thus obviating RCMP’s liability.

The U.S. Court of Appeals, D.C. Circuit, reversed and remanded, holding that RCMP’s termination of contract had a direct effect in the U.S. On appeal, CC reiterated the arguments it had made in district court—that “any one of the losses caused by the termination of its contract with RCMP¼qualifies as a direct effect in the United States.” The Court addressed only the two alleged direct effects in the U.S. that RCMP challenged: the lost profit from onboard revenues and the lost travel agency fee, both of which RCMP argued were “too attenuated or remote to amount to a ‘direct effect.’” [664] 

As might be expected, the appeal turned on the question of what constitutes a direct effect under the FSIA. Quoting Upton v. Empire of Iran, 459 F.Supp. 264, 266 (D.D.C.1978), the Court notes that a direct effect is “one which has no intervening element, but, rather, flows in a straight line without deviation or interruption.” [664] It then declines to decide the first issue—the nonpayment of onboard revenues, which did present the possibility of an intervening effect—in favor of the second issue, where “no intervening event stood between RCMP’s termination of the contract and the lost revenues from the travel agency contract and the Charter Party Agreements.” [664] The travel agency agreement was a done deal, the Court explained: 

“CC would have received a flat fee no matter how many passengers the travel agency booked. Likewise, ‘all that remained for the [Charter Party Agreements] to be formally consummated was for the cruise lines to sign the agreements once RCMP confirmed its contractual responsibility for Canadian taxes.’ Appellants’ Br. 40. In both instances, then, RCMP’s termination of the CC contract led inexorably to the loss of revenues under the third‑party agreements. This is sufficient. As the Supreme Court explained in Republic of Argentina v. Weltover, an effect qualifies as direct ‘if it follows as an immediate consequence of the defendant’s¼activity.’ 504 U.S. 607, 618, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992) (internal quotation marks omitted). In Weltover, the Court concluded that Argentina’s unilateral extension of bonds held by foreign creditors caused a direct effect in the United States because as a consequence of Argentina’s breach, ‘[m]oney that was supposed to have been delivered to a New York bank for deposit was not forthcoming.’ Id. at 619, 112 S.Ct. 2160. So too here. Because RCMP terminated the contract, revenues that would otherwise have been generated in the United States were ‘not forthcoming.’”

RCMP resisted this conclusion, arguing that it never agreed to any “single aspect of the underlying transaction that...[would] take place in the United States.” But the Court stated that under the FSIA, all that was needed was that the effect be “direct”; the foreign sovereign need not agree that the effect would occur (inviting comparison with Weltover, 504 U.S. at 618, 112 S.Ct. 2160). The Court noted that in the present case, the contract itself required the ships to come from Holland America and Royal Caribbean cruise lines, “and record evidence makes clear that both are U.S.‑based companies‑Holland America in Seattle and Royal Caribbean in Miami.”

RCMP then tried to argue that harm to a U.S. citizen, in and of itself, cannot satisfy the ‘direct effect’ requirement. But the Court notes that although that was true, the cases RCMP relied on involved situations in which the plaintiff’s U.S. citizenship was the only connection to the U.S., with all activities covered by the contract occurring outside the U.S. By contrast, the Court states, CC relied on far more than its U.S. citizenship; all of its efforts to negotiate the Charter Party Agreements occurred in the U.S.: “at least one of the ships would have moved through U.S. waters to Vancouver; the termination of the contract thwarted over $40 million (U.S.) worth of cruise‑related business in the United States; and the travel agency agreement was negotiated in and called for performance in the United States.” [665]

To RCMP’s argument that the termination of the Charter Party Agreements did not constitute a direct effect because it did not harm CC, the Court replied that nothing in the FSIA requires that the direct effect harm the plaintiff, only that the direct effect occur in the U.S., caused by a foreign government’s act outside the U.S. And, as the Court noted, “Perhaps CC has suffered less harm than it claims, but that issue relates to the merits of its case, not the jurisdictional question we face here.”

Citation: Cruise Connections Charter Management 1, LP v. Attorney General of Canada, 600 F.3d 661 (D.C. Cir. 2010).

TERRORISM

D.C. Circuit concludes neither Fifth Amendment due process nor Eighth Amendment cruel and unusual punishment clauses apply to nationals injured while detained by U.S. military in Afghanistan and Iraq when U.S. was engaged in wars

Between 2003 and 2004, four Afghan and five Iraqi citizens were captured and held in Afghanistan and Iraq, respectively, by the U.S. military. The nine sued Donald Rumsfeld, former secretary of the U.S. Department of Defense, and three high‑ranking Army officers for damages and declaratory relief as a result of their treatment while in U.S. custody. That treatment, they alleged, included physical brutality and mental abuse, including sleep deprivation, sexual assault, death threats, humiliation, and the like. The district court dismissed all claims for lack of subject matter jurisdiction. The U.S. Court of Appeals for the D.C. Circuit affirms.

On appeal, each Appellant brought two constitutional claims pursuant to Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971). They argued Appellees committed torture in violation of Appellants’ due process right under the Fifth Amendment and that Appellees’ conduct constituted cruel and unusual punishment in violation of the Eighth Amendment. Citing two of its own cases as controlling, the Court concludes that neither amendment applies to nonresident aliens who were injured extraterritorially while detained by the military in foreign countries where the U.S. was engaged in wars. 

Rasul v. Myers (Rasul I), 512 F.3d 644 (D.C. Cir.), vacated, 129 S. Ct. 763 (2008), held that defendants were protected by qualified immunity because, even assuming arguendo they possessed Fifth and Eighth Amendment rights, those rights were not clearly established at the time of their detention and alleged torture. The Court also cites Boumediene v. Bush, 476 F.3d 981, 984 (D.C. Cir. 2007), rev’d, 553 U.S. 723 (2008), in which, it says, the Supreme Court “made clear¼it had ‘never held that noncitizens detained by our Government in territory over which another country maintains de jure sovereignty have any rights under our Constitution,’ 553 U.S. at 770.” [16] 

Rasul v. Myers (Rasul II), 563 F.3d 527 (D.C. Cir.) (per curiam), cert. denied, 130 S. Ct. 1013 (2009), held that federal courts cannot fashion a Bivens action when “special factors” counsel against doing so, determining that the “danger of obstructing U.S. national security policy is one such factor.” [18] “The same rationale applies here,” the Court concludes: “Allowing a Bivens action to be brought against American military officials engaged in war would disrupt and hinder the ability of our armed forces ‘to act decisively and without hesitation in defense of our liberty and national interests.’ Detainees Litig., 479 F. Supp. 2d at 105.” [18] Even if Appellants could claim the protections of the Fifth and Eighth Amendments, the Court states it “would decline to sanction a Bivens cause of action because special factors counsel against doing so.” [20] 

Appellants also alleged violations of the law of nations under the Alien Tort Statute (ATS), 28 U.S.C. § 1350. The district court had deemed Defendants entitled to absolute immunity under the Federal Employees Liability Reform and Tort Compensation Act of 1988 (“Westfall Act”), Pub. L. No. 100‑694, 102 Stat. 4563, according to which the Federal Tort Claims Act (FTCA), 28 U.S.C. §§ 1346, 2671 et seq., provides the exclusive remedy for a tort committed by a federal official or employee within the scope of his employment. The FTCA requires plaintiffs to substitute the U.S. as defendant and file an administrative claim with either the Department of Defense (DoD) or the appropriate military department before bringing suit. 

The Appeals Court concludes Appellees were entitled to absolute immunity under Razul II, which held the alleged tortious conduct (the detention and interrogation of suspected enemy combatants) was “‘incidental to [their] legitimate employment duties’ because it was ‘the type of conduct the defendants were employed to engage in’ [citation omitted].” [20] Razul II also held the ATS claims “were properly restyled as claims against the United States that are governed by the FTCA” and upheld their dismissal for failure to exhaust administrative remedies. [19] Like the Rasul defendants, this Court reasons, Appellees were acting within the scope of their employment in carrying out their allegedly egregious acts. And, the Court notes, the “record is devoid...of any suggestion” the plaintiffs filed an administrative claim with DoD or a military department. [22]

To Appellants’ argument that the Westfall Act did not cover “‘egregious torts that violate jus cogens norms’ because the Act grants immunity for a ‘negligent or wrongful act or omission’ only,” the Court cites Rasul I, which, acknowledging plaintiffs had “plainly alleged ‘seriously criminal’ conduct,” held those allegations “did not alter our conclusion that the defendants’ conduct was incidental to authorized conduct.” 512 F.3d at 659‑60. [21] 

Citation: Ali v. Rumsfeld, Case No. 05‑cv‑01378 (D.C. Cir 2011).

TERRORISM

D.C. Circuit concludes Foreign Affairs Reform and Restructuring Act as amended by REAL ID Act confers on detainee no habeas or due process right to judicial review of conditions in Iraq before being transferred into its custody 

Since 2004 the U.S. military had detained Shawqi Omar, a dual citizen of Jordan and the U.S., in Iraq on the basis of evidence he had participated in al Qaeda’s terrorist activities there. The U.S. government apparently intended to transfer him to the custody of Iraq. In 2005 Omar filed a habeas petition claiming the right to judicial review of conditions in Iraq before being transferred there, and that he had a habeas and due process right not be transferred if (as he alleged) he was likely to be tortured while in Iraqi custody. In 2008 the U.S. Supreme Court in Munaf v. Geren, 553 U.S. 674 (2008), concluded that Omar had neither a habeas corpus nor a due process right to “judicial second‑guessing of the Executive’s determination that he was not likely to be tortured in Iraqi custody.” [Slip op. 2]

In his amended habeas petition to the district court, Omar posed both a novel statutory argument—that the Foreign Affairs Reform and Restructuring Act of 1998 (FARR), as supplemented by the REAL ID Act of 2005, gave him the right to the judicial review he sought—and a refashioned constitutional argument—that the habeas corpus guarantee, either by itself or in conjunction with the Due Process clause or FARR, entitled him to the review. The district court rejected both arguments, granting the Government’s motion to dismiss.

In affirming the district court’s decision, the U.S. Court of Appeals for the D.C. Circuit concludes that Omar’s constitutional argument already had been authoritatively addressed and rejected in Munaf, stating: “The Supreme Court has established that there is no freestanding constitutional right for extradition or military transferees to obtain judicial review of conditions in the receiving country before being transferred.” [Slip op. 15] The Appeals Court likens Omar’s status to that of an extradition or military transferee: “Omar is a military detainee captured during war and now facing transfer to the custody of another nation. In addition, because Omar is facing transfer to the custody of another sovereign that has convicted him of a crime, his situation is analogous to that of an extradition transferee—a point Omar himself acknowledges.” [Slip op. 12]

To Omar’s argument that the REAL ID Act, to the extent it amended FARR, violated the Constitution’s guarantee of habeas corpus, the Appeals Court states while FARR does allow aliens in removal proceedings to obtain the type of judicial review Omar seeks, in FARR on its own and, certainly, as supplemented by the REAL ID Act, “Congress has not created such a right for extradition or military transferees such as Omar.” [Slip op. 21] In support, the Court states, “Omar is not subject to a removal order and has not filed—and, as a military transferee, is not eligible to file—a petition for review under § 242 of the Immigration and Nationality Act. The REAL ID Act thus confirms that Omar possesses no statutory right to judicial review of conditions in the receiving country.” [Slip op. 9‑10] And, despite Omar’s argument to the contrary, the Court concludes, “the fact that Congress, in the FARR Act, created such a right for immigration transferees does not raise a constitutional problem simply because Congress did not also extend the right to extradition and military transferees.” [Slip op. 20]

In his Concurrence, Judge Griffith provides a spirited rebuke of the majority’s jurisdictional stance:

“Our quarrel over jurisdiction stems from my belief that the FARR Act ‘trigger[s] constitutional habeas’ by giving Omar a colorable claim that his transfer to Iraqi authorities would be unlawful¼.When an American citizen is in U.S. custody, the Constitution’s guarantee of habeas corpus entitles him to assert any claim that his detention or transfer is unlawful. Because Congress may not deprive Omar of access to the courts without suspending the writ or repealing the statutory basis for his claim, neither of which it has done here, we must consider his argument on the merits.” [22] Judge Griffith adds, 

“[T]he Supreme Court has repeatedly held that only the clearest of statements from Congress should be read as repealing our habeas jurisdiction, see Demore v. Kim, 538 U.S. 510, 517 (2003)¼.Section 2242(d) of the FARR Act, which the majority suggests strips the federal courts of jurisdiction to hear Omar’s claim, does not speak with the required clarity. Although it leaves no doubt that the FARR Act does not itself ‘provid[e] any court jurisdiction’ to hear claims outside the immigration context, it just as plainly leaves undisturbed our jurisdiction to hear FARR Act claims under 28 U.S.C. § 2241 [federal habeas statute]. A plurality of the circuits have reached the same conclusion.” [Slip op. 23]

Citation: Omar v. McHugh, 646 F.3d 13 (D.C. Cir. 2011).

TERRORISM

United States Court of Appeals reverses summary judgment of Anti‑Terrorism Act lawsuit against the Palestinian Authority brought by estate of an employee of the U.S. State Department who was killed in a road side bomb because a reasonable juror could conclude that Palestinian Authority employees provided material support to the bomber

Mark Parsons was providing security for a U.S. state department convoy in the Gaza strip when he was killed by a roadside bomb. The Plaintiffs in this case are Parsons’ estate, his siblings, and his parents’ estate. The Defendants are the Palestinian Authority and the Palestinian Liberation Organization.

The Plaintiffs initially filed this lawsuit in the United States District Court for the District of Columbia under the Anti‑Terrorism Act of 1991 which gives United States nationals killed or injured by acts of terrorism the right to bring a civil lawsuit in federal court. The complaint alleged that the Defendants were at least partially responsible for the attack by providing material support to and conspiring with the terrorist or terrorists who planted and detonated the bomb. The district court found that the Plaintiffs’ allegations were insufficient granted summary judgment for the Defendants. 

The United States Court of Appeals affirms with respect to the conspiracy claim, but reverses with respect to the material support claim. The Court holds that a reasonable juror could conclude that both Defendants could have provided material support to terrorists to carry out the attack.

On appeal, the Plaintiffs dispute the district court’s interpretation of 18 U.S.C. § 2339A. According to the district court, Section 2339A requires them to identify the actual bomber. Plaintiffs claim that they should prevail so long as they can show that the Defendants provided material support to whoever directly carried out the attack. The Court agrees with Plaintiffs understanding of that statute.

The Court first took by an accounting of the evidence which the Plaintiff’s presented. 

“Among the evidence the Parsons family offered to prove these theories, three documents, discovered in the Palestinian Authority’s investigative file and that the parties and the district court have thus far treated as admissible, are central to this case. The first document ¼ is Qarmout’s statement to Palestinian Authority interrogators in which Qarmout admits that he prepared to plant a bomb on Salahadeen Road in approximately the same location as the bomb that killed Parsons. In that statement, Qarmout also describes the three bombs he possessed in the month prior to this attack. The second piece of evidence ¼ is the FBI’s forensic report. Lastly, the family relied on a two‑page memo having an unidentified author addressed to the ‘Director General of the Preventive Security Service,’ the significance of which the parties forcefully debate. In a section titled ‘Conclusion and personal interpretation of what happened according to the information in my possession,’ the memo includes several statements about the role Palestinian Authority employees played in the bombing including: ‘The explosive device was planted 20 meters away from the National Security checkpoint, a fact that indicates that those present in front of the checkpoint that day have previous knowledge of the presence of the device.’ ‘[A]fter information of the arrival of US embassy staff was leaked, either by the National Security personnel at the checkpoint or by those who were accompanying the convoy, the person responsible for the explosion detonated the device.’ The memo also includes several observations about the bomb ¼. as well as two statements about when the device was prepared and buried: ‘After examining the material used, we learned it had been prepared more than twenty days earlier and that a substantial portion of the nitric acid had been lost, separated from the urea, and reacted with the iron in the outer casing.’ ‘As we mentioned above, the device was present for 20 days at least . . .’”

“In addition, the Parsons family claimed they could prove that Amer Qarmout and/or the Popular Resistance Committees directly carried out the attack. Moreover, the family insisted that even if they were unable to identify the actual bomber, they could nonetheless prevail so long as they could show what role the Palestinian Authority had played.” [Slip op. 6]

The Court of Appeals goes on to examine the standards of summary judgment. “In our view, a reasonable juror could conclude that Qarmout never planted a bomb; that the actual bomb had been in the ground for twenty days, long before Qarmout began digging his hole; that Qarmout planted a different bomb; or even that he planted the bomb to target Israelis but never detonated it. A reasonable juror, however, could also believe Qarmout’s incriminating statements but disbelieve his exculpatory ones, and thus conclude that he lied about calling off the bombing. Likewise, a reasonable juror could find that Qarmout planned to and did plant the 30 to 35 kilogram bomb that had been in his possession, as opposed to the 12 kilogram bomb referred to in his statement. And it would hardly be unreasonable for a juror to conclude that the reference in the Palestinian Authority memo to the bomb having been in the ground for twenty days was a misstatement and that in fact the memo’s author meant to write only that the bomb had been prepared, but not necessarily planted, twenty days earlier. After all, the memo first says the bomb ‘had been prepared more than twenty days earlier,’ meaning that its later statement—’as we mentioned above, the device was present for 20 days at least... ‘—could be read as only cross‑referencing that earlier statement. Sorting out these contradictions, deciding how much weight to give evidence that supports or undermines the family’s case, and evaluating how much credibility to assign Qarmout’s incriminating versus exculpatory statements are prototypical jury functions that courts may not commandeer. Liberty Lobby, 477 U.S. at 255. We therefore conclude that the Parsons family has demonstrated the existence of a genuine dispute of material fact as to whether Qarmout was the bomber.” [Slip op. 11‑12]

The Defendants disputed whether Plaintiffs could show that the Defendants provided Qarmout with material support. Qarmout’s statements to Defendants were made only while digging a hole rather than while planting a bomb and therefore should not be considered material support. The Court finds that this type of evidentiary argument should be addressed to the jury.

Defendants then claimed that the Plaintiffs failed to “cite any legal authority” establishing that complying with Qarmout’s request to look the other way while he planted a bomb satisfies the material support requirement of Section 2339A. The Court then considers the meaning of the term “service.” Because Section 2339A does not define “service,” the Court looked to a recent Supreme Court decision (Holder v. Humanitarian Law Project, 130 S. Ct. 2705 [2010]). In that case, the Supreme Court found that “service” “refers to concerted activity” and carries its “ordinary meaning,” that is “the performance of work commanded or paid for by another: a servant’s duty: attendance on a superior” or “an act done for the benefit or at the command of another.” The Court then concludes that, assuming that the Defendants’ checkpoint personnel acted as the Plaintiffs claim, such conducts falls within the meaning of service.

In sum, the Court requires a party seeking relief under 18 U.S.C. § 2339A to only show that the other party provided material support to whoever carried out the attack. A party seeking relief under 18 U.S.C. § 2339A will not need to identify the terrorist or the person or persons responsible for that attack. Furthermore, evidence that places a person who had the capability, the materials, the same techniques and the intent to carry out an attack, and was in direct contact with the party being sued, and such an attack occurred, is enough evidence that that party provided material support to a terrorist attack to survive summary judgment in a 18 U.S.C. § 2339A case.

One judge concurs in part and dissents in part. The judge disagrees with the majority on what constitutes “material support” and states that there should be a specific intent requirement. Another judge concurs with the reversal of summary judgment but dissents from the court’s affirmation of summary judgment on the family’s conspiracy claim. 

Citation: Estate of Parsons v. Palestinian Authority, Case No. 10‑7085 (D.C. Cir. 2011).

TORTURE

Eleventh Circuit reverses dismissal for lack of standing to sue under Torture Victim Protection Act of 1991 where plaintiff children of murdered union leaders qualified as wrongful death claimants under Colombian law 

Against the backdrop of a long history of trade union violence in Colombia, employees of the Colombian company Drummond organized a trade union. Shortly after, Drummond company entities and employees (“Drummond”) hired and paid paramilitaries from the United Self‑Defense Forces of Colombia (a.k.a. AUC) to destroy the union and, in 2001, murder union leaders Valmore Locarno Rodriguez, Victor Hugo Orcasita Amaya, and Gustavo Soler Mora.

The children of Locarno, Orcasita, and Soler (the Children) brought suit in district court, alleging Drummond hired the AUC to assassinate their fathers in violation of the Alien Tort Statute (ATS), 28 U.S.C. § 1350, the Torture Victim Protection Act of 1991 (TVPA), 28 U.S.C. § 1350, and the wrongful death laws of Colombia, and that the murders caused the Children damages including emotional harm, loss of companionship, and financial support. The district court dismissed the complaint on res judicata and preclusion grounds and alternatively for lack of standing to sue under both the ATS and the TVPA. 

The U.S. Court of Appeals for the Eleventh Circuit reverses and remands on the res judicata issue and reverses on the issue of standing.

The key issue on appeal is the Children’s standing to sue under the TVPA. After affirmatively answering the threshold question whether the Children satisfied the Constitutional requirement of “Case or Controversy” for standing, the Appeals Court addresses whether the TVPA provides a cause of action in this case. The Court lays out all the requirements for obtaining relief pursuant to the TVPA: i.e., the plaintiff must be “(1) a legal representative or any person who may be a claimant in an action for wrongful death; (2) of a victim of an extrajudicial killing; (3) committed by an individual acting ‘under actual or apparent authority, or color of law, of any foreign nation.’” [1346] After holding that plaintiffs satisfied the second and third prongs, the Court focuses on the first, stating: “The Parties’ dispute centers upon whether the Children are proper ‘claimant[s] in an action for wrongful death’ as that phrase is used in the TVPA.” [1347] The Court notes that 

“Congress did not explicitly define, nor is it apparent from the face of the TVPA, how a court should properly ascertain who is a ‘claimant in an action for wrongful death.’ Neither can we discern from the statute itself whether Congress intended state law or federal law to supply the meaning of ‘claimant in an action for wrongful death.’ See De Sylva v. Ballentine,351 U.S. 570, 76 S.Ct. 974, 980, 100 L.Ed. 1415 (1956) (‘The scope of a federal right is, of course, a federal question, but that does not mean that its content is not to be determined by state, rather than federal law.’).” [1348] The Court then turns to the TVPA’s legislative history for illumination: 

“[T]he report issued by the House of Representatives Committee on the Judiciary states that ‘[c]ourts may look to state law for guidance as to which parties would be proper wrongful death claimants.’ H.R.Rep. No. 102–367(I), at 4, 1992 U.S.C.C.A.N. at 87 (1991). The Senate Committee Report similarly explained ‘[t]he term ‘beneficiary in a wrongful death action’ is generally intended to be limited to those persons recognized as legal claimants in a wrongful death action under Anglo–American law.’ S.Rep. No. 102–249, at 7 (1991). In addition, the Senate Report also elaborated that:

Where application of Anglo–American law would result in no remedy whatsoever for an extrajudicial killing, however, application of foreign law recognizing a claim by a more distant relation in a wrongful death action is appropriate. In re Air Crash Disaster Near New Orleans, Louisiana, on July 9, 1982, 789 F.2d 1092, 1097–98 (5th Cir.1986) (recognizing claim of nephew for wrongful death of aunt where Louisiana law on wrongful death action would have afforded no remedy). Id. at n. 10. Thus, Congress’s intent, as evinced in the House and Senate reports, is that state law should govern the determination of whether a plaintiff is a claimant in an action for wrongful death and, where state law would provide no remedy, a court may apply the foreign law that would recognize the plaintiff’s claim.

We must therefore first determine whether the plaintiffs are wrongful death claimants under Alabama law. Although the TVPA instructs courts to look to ‘state law’ to determine the parties’ status as wrongful death claimants, it does not specify whether a court should apply the state’s ‘whole law, including its choice‑of‑law provisions, or only its substantive “internal law.” We need not resolve which approach to apply in this case, because ultimately under either framework Colombian law applies.

The Children alleged in their complaint that they are ‘legal beneficiaries’ under Colombian law, with standing to sue for their personal damages. In further support of this proposition, they attached to their pleadings filed in response to the Motion to Dismiss, an affidavit containing the ‘legal opinion of Pedro R. LaFont Pianetta, a former Justice on the Supreme Court of Colombia. The record does not reflect that the appellees have disputed the Children’s assertion that they are proper wrongful death claimants under Colombian law; Mr. Pianetta’s conclusions to that effect; or Mr. Pianetta’s qualifications to render this opinion.” [1348‑1350] 

The Court thus concludes the Children properly alleged their entitlement to proceed as wrongful death claimants under Colombian law and that therefore they adequately pled a TVPA violation.

Citation: Baloco v. Drummond Co., Inc., 640 F.3d 1338 (11th Cir. 2011).