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

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

2001 International Law Update, Volume 7, Number 6 (June).

CHILD ABDUCTION

In matter of first impression involving father seeking return of children to Mexico under Hague Abduction Convention, Sixth Circuit affirms return order despite claim that U.S. grandparents had no opportunity to determine whether return to Mexico would endanger children

Perry March is an American citizen who moved to Mexico with his two children after the disappearance of his wife in 1996. The maternal grandparents of the two children (the Levines) obtained court-ordered visitation with the children in Jalisco, Mexico. The grandparents visited the children and later took them back to the United States where they stayed beyond the court-ordered visitation period.

March went to federal court to obtain the return of his children under the International Child Abduction Remedies Act (hereinafter ICARA), which codifies the Hague Convention on the Civil Aspects of International Child Abduction [October 25, 1980, T.I.A.S. No. 11,670, 1343 U.N.T.S. 89],  Art. 3, 12.

Pursuant to ICARA, the custodial guardian has the burden of showing that the child or children in question was “¼[w]rongfully removed or retained in breach of his custody rights under the laws of the contracting state in which the children habitually resided before they were removed or retained.” The Court noted however, that a court is not bound to return the children in question to the custodial guardian, if the defendants can show, pursuant to the Convention, that their return would bring a grave risk of harm to them.

To show the existence of that risk, the grandparents alleged that March had murdered his wife. The Court noted, however, that the authorities had not charged March with any crime and that there was no evidence that anyone had murdered his wife. Holding that March had proven wrongful retention, the Court gave March summary judgment, ordering the Levines immediately to return the children to their father in Mexico.

The Levines appealed. They argued that the court erred (1) by declining to disentitle March from filing his petition in light of various state court contempt orders entered against him; (2) by refusing to allow discovery on the merits prior to issuing a ruling; and (3) by giving summary judgment to March. March filed a cross-appeal contending that the lower court had mistakenly failed to address his argument that the Levine’s lacked standing to assert any defenses.

The U.S. Court of Appeals for the Sixth Circuit, however, affirms. It rules that the district court had not erred in declining to disentitle March, since the state court orders were not “criminal” contempts. Perhaps more significantly, the state court had entered the orders after March had moved to Mexico. The Court of Appeals writes that “[t]o the extent that civil contempts have formed the basis for disentitlement, such cases are inapposite to the facts here because they involved appellate-level application of the doctrine to an appellant who was a fugitive from contempt orders entered by the district court in the case sub judice. (Cits.) The Court also held that “[a]pplying the fugitive disentitlement doctrine would impose too severe a sanction in a case involving parental rights.” [Slip op. 16]

The Levines also maintained that the lack of discovery and of an evidentiary hearing precluded them from developing their defenses under Articles 13 and 20 of the Convention. The Court disagrees, noting that this issue one of first impression. “[S]uch an argument is not preserved for appeal unless it is first advanced in the district court by the filing of an affidavit pursuant to Federal Rule of Civil Procedure 56(f), or by the filing of a motion for additional discovery. Assuming that a motion for discovery without an accompanying affidavit is sufficient, the Levines filed such a motion. Nevertheless, the Levines’ motion sought discovery only to develop proof regarding the narrow issue of the children’s habitual residence, not any of the treaty exceptions to [the] [sic] return of  the children or any other issue. Therefore, we review the issue raised only as it pertains to their discovery request.” [Slip op. 24].

Citation: March v. Levine, 249 F.3d 462 (6th Cir. 2001).

COPYRIGHT

In infringement action by Bruce Springsteen against an English company, English Court of Appeal dismisses losing company’s appeal and sounds death knell for traditional form of “best evidence” rule by approving reliance on oral secondary evidence as to contents of lost assignment in Springsteen’s chain of title based on showing of reasonable search

In 1971, Bruce Springsteen, then 21, met Mssrs. Appel and Cretecos, songwriters. The following year, Springsteen, Appel and Cretecos agreed that the latter two would promote Springsteen’s interests. The two men initially set up three partnerships, Laurel Canyon Management (LCM) to serve as Springsteen’s manager, Sioux City Music, Inc.(SCM) to handle his songwriting activities and Laurel Canyon Productions (LCP) to deal with his recordings.

From the beginning, the parties intended that Jules Kurz, Esq., a New York attorney with experience in the music industry, would form corporations to take over from the partnerships when the parties could afford the required fees. Springsteen signed contracts with the three partnerships to perform the above functions on his behalf. Apparently the successor corporations came into being between June 1972 and June 1973.

Soon afterwards, LCP, Inc. entered into a recording contract with CBS, a major record and master tape producer, since taken over by Sony. Over the following year, Appel and Cretecos had Kurz incorporate several companies in New York. Laurel Canyon, Ltd. took over LCP’s business, SCM eventually became Laurel Canyon Music Ltd., and LCM became Laurel Canyon Management, Ltd. According to Kurz, the minutes of the first directors’ meeting would have included a signed standard form to transfer all partnership assets to the corporations (including copyrights).

Masquerade Music Ltd. was an English company which imported over a dozen Springsteen songs and CDS, claiming it was completely unaware that the recordings were copyrighted. In the ensuing litigation brought by Springsteen in the English Chancery Court, Masquerade denied that the minutes recording the transfer of assets from the partnerships to the corporations contained an assignment of partnership copyrights. In 1975, one of Springsteen’s records sold more than one million copies.

U.S. litigation soon broke out between Springsteen and Appel. After some discovery, the parties settled the suit in May 1977 in the “basic agreement.” The parties included Springsteen, the three corporations and Appel. After becoming assignee of all copyrights, Springsteen assigned to Laurel Canyon Music, Ltd., inter alia, a half share in three of the copyrights disputed before the English courts. In May 1983, Laurel Canyon reassigned these copyrights to Springsteen.

In April 1979, Cretecos sued Appel and others in the U.S. claiming that Appel had misled Cretecos into selling his company shares at a bargain price. At every point in that case, Cretecos acted on the assumption that the copyrights at issue here were assets of the three corporations.

After ruling that defendants had infringed plaintiff’s copyrights, the English court raised a “best evidence” issue by first quoting Section 36(3) of The Copyright Act of 1956 as follows: “[n]o assignment of copyright (whether total or partial) shall have effect unless it is in writing signed by or on behalf of the assignor.” Despite a search of (disputed) diligence, Springsteen was unable to produce either the original or copies of the alleged written copyright assignments but had to rely on “secondary” oral evidence. Objecting to Springsteen’s testimonial “secondary evidence,” defendants contended, inter alia, that the alleged search was not diligent enough. In their view, the more crucial the writing was, the more thorough must be the search. The Chancery Court ruled for Springsteen and defendants filed an appeal. The Court of Appeal (Civil Division), however, unanimously dismisses defendants’ appeal.

The Court’s lead opinion preliminarily points out that, in this case, the only critical documents were the corporate minutes and that defendants do not dispute their existence. The key question here deals with the contents of those minutes, i.e., whether they contained language validly assigning the copyrights to the new corporations. Referring to the exception for lost writings under the “best evidence” rule, defendants contended (1) that plaintiff’s search for the documents had been minimal and (2) that the trial judge had erred in using a balance-of-probabilities test to determine the contents of the minutes.

The following testimony by Attorney Kurz is, in the Court’s view, the “only cogent evidence” about the fate of the corporate minutes. “My normal procedure would have been to include such an assignment in the corporate books as part of the minutes of the first meeting of directors and I believe I would have done so in this case. I no longer have copies of these documents which were destroyed along with all the documents I had relating to Springsteen when I moved my offices to White Plains, New York, a few years ago.” [para. 48]

The closest thing to a “best evidence” exclusionary rule, the Court explains, turns out to be an “original writings rule.” The older common law preferred that a party seeking to prove the contents of a writing produce the original. If a proponent showed that the original writing was lost or destroyed in good faith, however, the law compromised by allowing for various types of “secondary evidence” of its contents. Failure to bring oneself within the recognized exceptions might sometimes rule out “secondary” proof of an alleged writing’s contents altogether. More often, it would generate an inference adverse to the party relying on the content of a writing.

After a thorough canvas of the English authorities, the Court declares that: “[i]n my judgment the authorities to which I have referred establish that by the mid‑nineteenth century, if not earlier, the so‑called best evidence rule was recognised by the courts as no more than a rule of practice to the effect that the court would attach no weight to secondary evidence of the contents of a document unless the party seeking to adduce such evidence had first accounted to the satisfaction of the court for the non‑production of the document itself. But even if that conclusion be open to doubt, there can in my judgment be no room for doubt that as the law stands today, some 150 years later, that is the position.” [para. 77]

Finally, the Court writes a quasi-obituary. “In my judgment, ... the best evidence rule, long on its deathbed, has finally expired. In every case where a party seeks to adduce secondary evidence of the contents of a document, it is a matter for the court to decide, in the light of all the circumstances of the case, what (if any) weight to attach to that evidence. Where the party seeking to adduce the secondary evidence could readily produce the document, it may be expected that (absent some special circumstances) the court will decline to admit the secondary evidence on the ground that it is worthless.”

“At the other extreme, where the party seeking to adduce the secondary evidence genuinely cannot produce the document, it may be expected that (absent some special circumstances) the court will admit the secondary evidence and attach such weight to it as it considers appropriate in all the circumstances. In cases falling between those two extremes, it is for the court to make a judgment as to whether in all the circumstances any weight should be attached to the secondary evidence.” [para. 85]

In the Court’s view, plaintiff met his burden of giving a reasonable explanation for his failure to produce the minutes. There is no allegation that plaintiff was in bad faith nor is there evidence that the searches were other than genuine -- though perhaps not exhaustive. The court below, therefore, did not err in considering plaintiff’s secondary evidence as to the contents of the corporate minutes.

Defendants next argued that, because of the importance of the minutes as a link in the chain of plaintiff’s title to the copyrights in question, the lower court had erred in using a balance-of-probabilities test rather than a higher standard. The Court disagrees, quoting precedent that explains how the proper standard works.

“The balance of probability standard means that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event, was more likely than not. When assessing the probabilities, the court will have in mind as a factor, ... that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is usually less likely than negligence. Deliberate physical injury is usually less likely than accidental physical injury.”

“Although the result is much the same, this does not mean that where a serious allegation is in issue the standard of proof required is higher. It means only that the inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred.” [para. 89]

The Court approves the lower court’s application of the probabilities to the facts of record. “Thus, it was from the outset the intention of Mr Appel and Mr Cretecos ... that the partnerships should be succeeded by limited companies; Mr Kurz, a lawyer with experience of the popular music industry, was instructed to ensure that the necessary formalities were completed to achieve that result; limited companies were duly incorporated which de facto carried on the businesses of the former partnerships; thenceforth, all concerned (including Mr Cretecos) proceeded on the basis that all the assets of the former partnerships were vested in the companies and that the partnerships were at an end; and when the basic agreement was signed in 1977 no suggestion was made that any assets (let alone the copyrights, which represented the core of the entire operation) remained outstanding in the former partnerships.” [para. 93].

Citation: Masquerade Music Ltd. v. Springsteen, 2001 WL 271986 (CA), [2001] E.W.C.A. Civ. 563 (Eng. Ct. App. (Civ. Div.), April 10).

CRIMINAL LAW

In drug importation prosecution, Supreme Court of Canada decides, as matter of first impression, that restrictive statute on duress defense violates principles of fundamental justice embodied in Section 7 of Canadian Charter of Rights and Freedoms

On April 30, 1994. Marijana Ruzic, a citizen of the former Yugoslavia, arrived in Canada with two kilos of heroin strapped to her body. Canadian authorities charged her (1) with importing heroin in violation of the Narcotic Control Act and (2) with using an illegal passport. At her jury trial, the defendant conceded that she had engaged in both violations but contended that she was then acting under such duress as would relieve her of any criminal liability.

According to her story, Marko Markovic had accosted defendant on a Belgrade street, telephoned her on many occasions and assured her that he would harm her mother if she did not deliver some heroin to a restaurant in Toronto. Markovic once burned her arm with a lighter and injected her with some sort of drug that made her sick. Defendant believed that Markovic had been a paid killer during the war. She admitted failing to go to the local police because she believed that they were crooked themselves.

Section 17 of the Canadian Criminal Code recognizes a defense to crime for one “who commits an offence under compulsion by threats of immediate death or bodily harm from a person who is present when the offence is committed.” Realizing she did not come within its purview, defendant persuaded the trial court of the unconstitutionality of Section 17 under Section 7 of the Canadian Charter of Rights and Freedoms. Section 7 provides that: “Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with the principles of fundamental justice.” After she asserted the common law defense of duress, the jury acquitted her.

The Crown filed for review of the acquittal on the heroin charge but the Court of Appeal dismissed the case. Upon a further appeal by the Crown, the Supreme Court of Canada dismisses.

As a matter of first impression, the Court declares that, while moral involuntariness does not nullify the actus reus or the mens rea of a criminal offense, it is a principle of fundamental justice which merits protection under the Charter. The penalty and taint of criminal liability should apply only to voluntary conduct which is the product of free will and bodily control, unimpeded by outside curbs. Imprisoning a person and branding him or her as a criminal contravene basic principles of justice if the individual lacked any realistic choice but to commit the crime.

In its plain meaning, Section 17 of the Code, in practical effect, requires that the threatener be either at the scene of the coerced crime or in a position to make good on the threat without delay if a defendant should refuse to commit it. The elements of immediacy and presence in combination obviously rule out threats of future harm. They also set up a major roadblock to relying on the defense in hostage or other third-party situations. Finally, these criteria would have a hard time qualifying under the principle of proportionality. The statutory injury to a defendant’s rights by applying Section 17 is not insubstantial.

Section 17 of the Code, however, did not entirely supplant the common law doctrine of duress. Over time, this doctrine has liberated itself from the strictures of immediacy and presence, thus becoming more compatible with Charter values. In a common law duress situation, the defendant has both rights as well as duties to third parties and to society. The law demands that there be a proportionality between the threat to personal integrity and the coerced criminal action, measured by the test of a reasonable person similarly situated. Under the same standard, the threat must take away from defendant any visibly safe means of escape. Finally, the common law requires the defendant to show some mettle and to put forth a normal degree of opposition.

The Court critically analyzes a number of U.S. cases (which, for the most part, are fairly restrictive on the scope of the duress defense) as well as the Commonwealth precedents. “This review of the common law defence of duress confirms that, although the common law is not unanimous in the United States, a substantial consensus has grown in Canada, England and Australia to the effect that the strict criterion of immediacy is no longer a generally accepted component of the defence. ... However, it is clear from the English cases that there must be a close temporal link between the threat of harm and the commission of the offence. The operative test in the English and Australian cases is whether the threat was effective to overbear the accused's will at the moment he committed the crime. Moreover, the safe avenue of escape test and the proportionality principle also appear to be key elements of the [common law] defence.” [para. 86]

In the Court’s view, the trial judge adequately charged the jury under the above common law principles. Moreover, he properly explained to the jury that, once defendant has raised the duress defense and put in some evidence to support it, the Crown assumes the burden to negate the defense beyond a reasonable doubt.

Citation: Regina v. Ruzic, 2001 S.C.C. 24 (Sup. Ct. Can. April 20).

INTERNET

German High Court issues two significant decisions on internet domain names, one deciding when domain registrar must cancel registrations and another explaining proper use of generic terms as domain names

On May 17, 2001, the German High Court (Bundesgerichtshof, BGH) issued two fundamental decisions on internet domain names.

The first decision concerns the domain name “www.ambiente.de.” The organization for Frankfurt trade fairs, Messe Frankfurt AG, conducts a regular trade fair for table settings, kitchens and living space called “Ambiente.” A private individual, however, had registered the German internet domain name “www.ambiente.de” and was unwilling to cancel it. Messe Frankfurt sued DENIC, the company that administers German internet domains ending in “.de”, to have the domain name at issue registered in its name. The district court in Frankfurt a.M. agreed with Messe Frankfurt that DENIC should cancel the initial registration and award the domain name to Messe Frankfurt.

The State Supreme Court in Frankfurt reversed, and the German High Court affirms. In the BGH’s view, DENIC merely registers and administers millions of internet domain names but has no duty to review every domain name registration to determine whether it infringes the legal rights of third parties. Even where DENIC is on notice of third party claims, DENIC ordinarily refers the claimant to the registered owner to resolve the dispute. In some cases, a court will have to decide who has a proper claim to a domain name.

German law requires DENIC to unilaterally cancel a domain name registration only where the law violation is obvious. In this case, all that Messe Frankfurt came up with was a statement from the original registrant promising not to use the domain name anymore. Thus, the BGH holds, DENIC did not have conclusive proof that Messe Frankfurt had a proper claim to that domain name.

In the second case, the BGH reviews a dispute over the use of generic terms in an internet domain name. The German language commonly uses the word “Mitwohnzentrale” (office for joint living) to refer to service providers that find roommates to share apartments and houses. An association of 25 such service providers registered the domain name: “www.mitwohnzentrale.de.” The website provided a listing of the member offices according to city. A competing association with 40 members challenged the domain name registration. It claimed that registrant was using a generic word misleadingly to attract users to its individual website although users would normally expect to find there a list of many such service providers.

The competing association’s claim was successful in the Hamburg district court. The Hamburg State Supreme Court affirms, considering the use of a generic word a violation of the German Law Against Unfair Competition (UWG), Section 1 (improper acts). The German High Court, however, reverses and remands to the State Supreme Court.

The BGH first points out that generic terms cannot be registered as trade names (Freihaltebedürfnis). Nevertheless, it finds that the use of a generic word does not necessarily violate competition rules. Such a violation occurs only where the advertising party interferes with the customer relationship by imposing itself on the customers of a competitor.

In this case, the registrant did achieve a competitive advantage but without foisting itself on these customers. In the Court’s view, this did not constitute the improper use of a generic word as a trade name or service mark. Both parties may use the term “Mitwohnzentrale,” and internet users generally understand that their search results are, to a substantial degree, haphazard and random.

On the other hand, German law does limit the use of generic terms in internet domain names. For example, it would be improper if the registrant used a generic term for a top level domain (such as “.de”) and blocked the use in other domains (such as “.com”) or the use of alternative spellings of the generic term. Since the use of generic terms must not be misleading in fact, there is a question here which the BGH remands to the State Supreme Court for determination. If the State Supreme Court does conclude that the domain name is in fact misleading, it may, for example, require that the website also refer the user to other service providers.

Citation: Press release of German High Court -Bundesgerichtshof, Mitteilung der Pressestelle Nr. 42/2001, 18. Mai 2001 (Urteil des Bundesgerichtshofes vom 17. Mai 2001 - I ZR 251/99 & I ZR 216/99).

JURISDICTION (PRESCRIPTIVE)

Fourth Circuit holds that ADEA does not apply to foreign citizens over forty who apply overseas to agents of U.S. companies for jobs in United States

Luis Reyes-Gaona (plaintiff) is a citizen of Mexico over forty years of age. North Carolina Growers Association (NCGA) is a U.S. corporation engaged in helping farming business in North Carolina to obtain laborers through the federal H-2A agricultural worker program. Del-Al recruits such workers as agent for NCGA and its members.

In May 1998, plaintiff went to a Del-Al office in Mexico to get on a list of workers looking for jobs in North Carolina through the H-2A program. Del-Al told plaintiff, however, that NCGA would not take workers over forty if they had never worked for NCGA before. Plaintiff then filed an action in a North Carolina federal court against both NCGA and Del-Al, claiming a breach of the Age Discrimination in Employment Act (ADEA).

The district court granted defendants’ motion to dismiss under Civil Rule 12(b)(6) for failure to state a claim upon which relief may be given because plaintiff was indisputably unauthorized to work in the U.S. at the time of his application. The court failed to decide a threshold contention that the presumption against the extra-territorial application of federal statutes stood in the way of applying the ADEA to this case. Plaintiff appealed to the U.S. Court of Appeals for the Fourth Circuit which affirms on other grounds.

Under the ADEA, it is unlawful “for an employer” to “fail or refuse to hire” or “otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age.” By virtue of the 1984 amendments, the present statutory definition of an employee: “includes any individual who is a citizen of the United States employed by an employer in a workplace in a foreign country.” This language overruled the many prior precedents limiting the ADEA to a purely domestic focus, thus presumptively ruling out its application to American citizens working for American companies in foreign nations. Principles of sovereignty, however, persuaded Congress not to extend extraterritorial prescriptive jurisdiction beyond this point.

“Notably missing from the 1984 amendments, however, is any provision regulating the conduct at issue here. Congress explicitly gave the ADEA extra‑territorial application with respect to certain U.S. citizens while simultaneously declining to extend coverage to foreign nationals like Reyes‑Gaona. Nothing in the amendments regulates age discrimination by U.S. corporations against foreign nationals in foreign countries. And the doctrine of expressio unis [sic] est exclusio alterius instructs that where a law expressly describes a particular situation to which it shall apply, what was omitted or excluded was intended to be omitted or excluded.”

“... [W]e can find [no case] ourselves, where the ADEA was interpreted to reach a situation analogous to the case at bar. Thus, a faithful reading of the plain text of the statute, especially in light of the 1984 amendments, compels the conclusion that Reyes‑Gaona's claim is not sustainable under the ADEA.” [N/A]

The Court also points to the staggering implications of judicially extending the ADEA to the millions of foreign citizens who simply file job resumes abroad for U.S. employment. Nor does the fact that the employment sought was itself stateside alter the case. “Congress [amended] the Act to provide for limited extra‑territorial reach. Since these amendments do not reach the case at bar, there remains nothing in the text of the ADEA to rebut the presumption against extending it to cover Reyes‑Gaona. And the limited nature of the 1984 amendments indicates that foreign nationals in foreign countries are not covered by the ADEA, regardless of whether they are seeking employment in the United States or elsewhere.” [N/A]

Citation: Reyes-Gaona v. North Carolina Growers Assn., Inc., 250 F.3d 861 (4th Cir. 2001).

NUCLEAR ENERGY

EU approves updated agreement with U.S. to improve cooperation and to stimulate joint activities in area of fusion energy research and development

In two separate decisions, the EU Council and the Commission have approved the “Agreement for cooperation between the European Atomic Energy Community represented by the Commission of the European Communities and the Department of Energy of the United States of America in the field of fusion energy research and development” signed on May 14, 2001, in Brussels.

The new Agreement is based on the “Agreement for Cooperation in the Peaceful Uses of Nuclear Energy between the European Atomic Energy Community and the United States of America,” signed in Brussels on November 7, 1995, and March 29, 1996 [see 1996 O.J. (L 12) 1, 20 May 1996]. It provided for cooperation in nuclear research and development including research on controlled thermonuclear fusion. For example, it deals with such matters as “tokamaks” [doughnut-shaped fusion research chambers], magnetic fusion energy technology, and plasma theory. Proposed activities include the exchange of information and personnel, and joint seminars (Articles I-III). The parties will also set up a Coordinating Committee to organize and oversee joint activities (Article IV).

The Annex provides special rules for protecting intellectual property rights arising out of such activities. For example, the parties are to treat copyrights belonging to the parties or to participants according to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). To the extent each party’s laws and regulations allow, the receiving party may distribute undisclosed or other confidential information to authorized participants (Annex A).

Representatives of the U.S. Department of Energy and the European Atomic Energy Community (Euratom) signed the Agreement and it will remain in force for five years. The Official Journal has published the text of the Agreement along with the two decisions.

Citation: Decisions 2001/411/EURATOM & 2001/412/EURATOM concerning conclusion of Agreement for cooperation between European Atomic Energy Community and United States Department of Energy, 2001 O.J. of European Communities (L 148) 78-85, 1 June 2001.

SOVEREIGN IMMUNITY

Reviewing dismissal of suit by Jewish Holocaust survivor against Germany, Seventh Circuit rules that Germany’s commission of jus cogens violations under customary international law did not constitute implied waiver of immunity from suit under FSIA

Jacob Sampson suffered unspeakable treatment as a slave laborer in the Auschwitz concentration camp during World War II and is his family’s only survivor. He eventually came to the U.S. and became a citizen. The Claims Conference is an international coalition of 23 Jewish non-profit organizations that, for the past 50 years, has been seeking restitution for Jewish Holocaust survivors.

In 1952, the Claims Conference and Germany (the Parties) concluded Protocols No. 1 and 2, providing (DM) 450 million for the benefit of Holocaust victims. In 1980, the Parties set up the “Hardship Fund” (the Fund) to provide payments to so far uncompensated victims. To receive an award from the Fund, victims may not take legal action to receive compensation. In 1990, the Parties founded the “Article 2 Fund” to remunerate victims who had received minimal or no payments. Under this arrangement, victims may receive a one-time payment of DM 5,000, and monthly payments of DM 500. It also precludes litigation to obtain compensation.

Finally, on July 17, 2000, the U.S. and Germany signed the “Foundation Agreement” (the Agreement) to create the “Remembrance, Responsibility and the Future Foundation.” It is a joint organization of the German government and German companies to compensate former forced laborers or those whom German companies had otherwise oppressed during the Nazi dictatorship. As part of this Agreement, the U.S. committed itself to oppose any challenges to Germany’s sovereign immunity with respect to any claim arising from the Nazi dictatorship.

Beginning in 1948, Sampson submitted several requests for compensation to the various funds. Fifty-eight years later, he received some benefits from the Article 2 fund. Sampson then brought a pro se action in federal court against the Parties, seeking $10 million for his suffering as a slave laborer and alleging that the Claims Conference had conspired to deprive him of full compensation.

The district court dismissed the complaint because it found Germany immune from suit under the Foreign Sovereign Immunities Act (FSIA) and because Sampson lacked standing to sue the Claims Conference. He appealed. The U.S. Court of Appeals for the Seventh Circuit, however, affirms.

First, Sampson argued that the court has jurisdiction under FSIA Section 1605(a)(1), which provides an exception to sovereign immunity where a foreign state has impliedly waived its immunity.

“A jus cogens norm is a special type of customary international law ... ‘accepted and recognized by the international community of states as a whole as a norm from which no derogation is permitted and which can be modified only by a subsequent norm of general international law having the same character.’ ... Most famously, jus cogens norms supported the prosecutions in the Nuremberg trials. [...] ‘International law does not recognize an act that violates jus cogens as a sovereign act.’ [Cit.] Thus, a violation of jus cogens norms ‘would not be entitled to the immunity afforded by international law.’” [Slip op. 10-13]

The Court is not persuaded that a violation of a non-derogable jus cogens norm of customary international law constitutes an implied waiver of a foreign state’s sovereign immunity. The Court also notes that the U.S. government filed an amicus curiae brief in support of Germany’s argument that it had sovereign immunity for its acts.

Sampson presented many statements affirming Germany’s responsibility for Nazi actrocities committed during World War II. These statements, however, show only that Germany has admitted violations of jus cogens -- not that it intended to waive its immunity from suit. In the Court’s view, the principle that international law is part of U.S. law does not necessarily mean that courts must read federal statutes to reflect the norms of international law.

“Since customary international law in the modern era is often based on the contents of multi-lateral treaties to which the United States attaches reservations (or refuses to join at all), there is also little reason to indulge in a presumption that Congress intends courts to mold ambiguous statutes into consistency with customary international law. ... Indeed, the statutory text provides immunity ‘subject to existing international agreements to which the United States [was] a party at the time of the enactment of the Act,’ 28 U.S.C. Section 1604, language which indicates that Congress was cautious about the development and source of future exceptions to the immunity it granted.” [Slip op. 20-21]

Furthermore, due to the constantly changing character of international law, the efforts of U.S. courts to keep up with such mutable principles would lead to legal and political conflicts. “Amicus argues that the phrase ‘waiver ... by implication’ in section 1605(a)(1), in conjunction with a legislative history that references common law examples of waiver, indicates a congressional intent that courts develop a common law to determine when an implied waiver occurs. That would mean a decision whether an implied waiver exists would be based on the evolving recognition of jus cogens norms in United States courts. If anything, the legislative history of section 1605(a)(1) cuts against Amicus’s argument by providing very specific examples of implied waiver ... These are all narrow examples which have a nexus with legal proceedings in the United States, and do not suggest a congressional intent that the list of potential waivers be extended. ...”

“Moreover, Amicus’s common law argument would be ground-breaking. ... Customary international law can evolve unpredictably without reference to the understandings of courts or Congress. While it is true that Congress intended the FSIA to be ‘a statutory regime which incorporates standards recognized under international law,’ ... Amicus’s suggestion would entail a truly novel and possibly unrestrained form of jurisdiction.” [Slip op. 23-25]

Second, the Court agrees with the district court that Sampson lacked standing to sue the Claims Conference. Sampson would have to show that the Conference had breached his legally protected rights. The Conference, however, does not provide him with a right to compensation. None of the Agreements granted individuals the right to question the Claims Conference’s actions.

Citation: Sampson v. Federal Republic of Germany, No. 97-3555 (7th Cir. May 23, 2001).

WORLD TRADE ORGANIZATION

WTO dispute settlement panel issues report on U.S.-Pakistan dispute on U.S. import restrictions on combed cotton yarn, finding U.S. safeguard measure inconsistent with GATT trading rules

In the Fall of 1998, the U.S. Department of Commerce, Office of Textiles and Apparel (OTEXA) looked into whether Pakistan was exporting combed cotton yarn to the U.S. in such increased quantities as to cause or threaten serious damage to the domestic industry producing like and/or directly competitive products. The Harmonized Tariff Schedule (HTS) classifies this kind of cotton yarn as Category 301.

The U.S. consulted with Pakistan pursuant to Article 6.7 of the Agreement on Textiles and Clothing (ATC) about such importations in December 1998. Later talks not having resulted in a mutually acceptable resolution, the U.S. imposed a safeguard measure to restrict the quantity of such imports, effective March 17, 1999. In March 2001, the U.S. renewed the quantitative restriction, limiting Pakistan to 5,262,665 kilograms for a one-year period. See 66 Federal Register 13307 (March 5, 2001).

On April 3, 2000, Pakistan asked the WTO to set up a Panel to review the matter. It claimed, among other things, that the U.S. had failed to examine the state of its entire domestic cotton yarn industry, had used improper data, and had failed to consider the impact of Mexican imports. On May 31, 2001, the Panel circulated its report. For the most part, it sided with Pakistan, holding, in particular, that the U.S. had acted inconsistently with various articles of the ATC.

First, the U.S. had breached Article 6.2 by excluding the production of combed cotton yarn by vertically integrated producers for their own use from the scope of “domestic industry producing like and/or directly competitive products” with imported combed cotton yarn. Second, the U.S. had violated Article 6.4 because the U.S. failed to take into account the effect of imports from Mexico (and possibly from other WTO members). Finally, the U.S. had acted incompatibly with Articles 6.2 and 6.4 because it did not show that the subject imports caused an “actual threat” of serious damage to the domestic industry. The Panel recommends that the U.S. promptly remove the import restriction.

Citation: United States - Transitional Safeguard Measure on Combed Cotton Yarn from Pakistan (WT/DS192/R) (31 May 2001). [Panel Report is available on WTO website: “www.wto.org.”]

WAR CRIMES

Second Circuit grants unconditional, voluntary dismissal of case against German banks over their role in supporting slave labor during World War II so that compensation funds can begin payments

Several Holocaust victims and their heirs filed a U.S. lawsuit in 1998 -- 1999 against German and Austrian banks seeking compensation. The plaintiffs settled with the Austrian defendants. The plaintiffs later sought voluntary dismissal of their case so that compensation payments from a particular fund of $4.5 billion could begin. The U.S. government filed a Statement of Interest, declaring that the foreign policy interests of the U.S. require that the organizations set up to furnishing compensation for Holocaust victims should resolve claims like this.

On July 17, 2000, Germany and the U.S. signed an agreement for the “Remembrance, Responsibility and the Future Foundation.” This is a joint organization of the German government and German companies to compensate former forced laborers or those who were harmed by German companies during the Nazi dictatorship (see Sovereign Immunity case, above). The German government and German companies have committed approximately $4.5 billion to the compensation fund. The Agreement, however, does not allow compensation payments unless the U.S. courts have dismissed all Holocaust litigation against German companies thus bringing about “legal peace” (Rechtssicherheit). The German Bundestag (Lower House of Germany’s Parliament) has to determine that “legal peace” has come to pass before it will allow the payment of funds. Accordingly, the plaintiffs (except one) moved for voluntary dismissal of their case.

The district court refused to dismiss. It expressed concerns for some plaintiffs who had settled their claims with Austrian banks in exchange for an assignment of the Austrian banks’ claims against German banks for misappropriation of bank assets. On May 11, 2001, the district court issued a written order that would grant only a conditional dismissal.

Both plaintiffs and defendants sought a writ of mandamus from the appellate court to have the court unconditionally dismiss the case. The U.S. Court of Appeals for the Second Circuit, in a per curiam opinion, issues the writ, remanding the case to the district court with directions to delete the conditions from the dismissal order. With this decision, a compensation fund for slave laborers can finally begin paying out $4.5 billion.

The Second Circuit succinctly explains its reasoning. First, the district court cannot require the legislature of a foreign sovereign such as the Bundestag to make a finding of “legal peace” before its summer recess. Second, the district court had demanded the fulfillment of certain assumptions in light of U.S. law showing that the plaintiffs will actually receive compensation. According to the Foundation’s rules, however, German law governs eligibility for compensation. The district court’s orders seemingly attempt to require Germany to change its laws. The refusal of a foreign legislature to enact or change a law, however, cannot be the basis for vacating a final judgment.

[Editorial Note: The number of entitled World War II slave laborers is estimated at one million persons, most of them in Central and Eastern Europe. Many of these, however, are elderly, and as stated during the above litigation, are dying at an estimated rate of 1,000 a day.]

Citation: In re: Austrian and German Holocaust Litigation, Duveen v. United States District Court for the Southern District of New York, 250 F.3d 156 (2d Cir. 2001). [See also The Washington Post, May 18, 2001, page A20; U.S. Department of State press statements, May 10 & May 18, 2001; The Week in Germany, May 25 & June 1, 2001.]

Singapore High Court rules against financially troubled Asian paper company. The High Court of Singapore has ordered financially strapped Asia Pulp & Paper Company (APP) to pay more than $10 million to two of its suppliers. The prevailing creditors were Avebe (Far East) Pte. Ltd., a subsidiary of a Dutch company, and Fiber Source International Corporation of New York. Early last March, APP had stopped all payments of interest and principal to its creditors, claiming that it needed twelve months in which to restructure its debt. The company apparently has debts and other obligations adding up to $13.4 billion. It has hired Credit Suisse First Boston and J. P. Morgan to advise it, inter alia, on how to stay out of bankruptcy court. A research report has valued APP’s Singapore assets as between $20 and $30 million. Most of its assets lie in Indonesia and China in the form of pulp and paper mills. APP recently announced, however, that, as a result of a settlement agreement between the Sinar Mas Group (which controls APP) and the Indonesian Bank Restructuring Agency (IBRA), shares in APP’s main Indonesian operating companies were pledged to IBRA. Thus, liquidation of APP might not give creditors a claim to these shares. Several Singapore lawyers have also pointed to the difficulty of enforcing the above High Court judgment in either Indonesia or China. Citation: The Wall Street Journal (Europe), May 7, 2001, page 7, byline of Sara Webb, Staff Reporter.

Belgian court convicts four Rwandans of genocide. On June 8, 2001, Belgian jurors handed down convictions of four Rwandans for taking part in the 1994 genocide against members of the Tutsi tribe. This appears to be the first time that a civilian body in one country has found persons guilty of committing crimes against humanity and genocide in another country. A 1993 Belgian statute authorized the local courts to try charges of atrocities no matter where carried out. The jury included a number of lay Belgians, e.g., a hairdresser, a truck driver, a university teacher and a journalist. Despite the magnitude and complexity of the 55 charges, the jurors impressed observers by their diligence, entering guilty verdicts on some charges and acquittals on others, often by split votes. The defendants consisted of a former government minister, a former university professor and two nuns, their sentences ranging between twelve and twenty years in prison. Rwandan Tutsi exiles had observed several Hutu extremists in Belgium and had filed a complaint in court. There may be a trend developing since domestic courts in Germany, Holland and Denmark have recently been prosecuting Bosnian Serbs and Muslims for alleged extraterritorial crimes committed during the Balkan wars. Moreover, Mexico plans to extradite an alleged Argentinean torturer to Spain while France started a case against an alleged torturer from Mali. Citation: The Christian Science Monitor, June 11, 2001, World Section, page 1, byline of Peter Ford.

U.S. certifies nations allowed to import shrimp. The U.S. Department of State has certified that 43 nations and one economy, as of April 30, 2001, may continue to export shrimp or shrimp products into the United States. These nations meet the importation requirements advanced in Section 609 of Public Law 101-162, that catchers have harvested the shrimp in a manner that does not in any manner adversely affect or threaten the survival of sea turtle species. This import prohibition does not apply where the U.S. Department of State has advised Congress that the government of a specific exporting nation has undertaken targeted measures to reduce the harm that shrimping would otherwise pose to sea turtles. Citation: U.S. Department of State Media Note (May 2, 2001).

In Ireland’s referendum, voters reject Nice Treaty. On June 8, Ireland was the first of the 15 EU members to vote on the Treaty of Nice. Drafted in December 2000, the Treaty would make major institutional changes in the EU government to allow for the accession of up to twelve new Member States, mostly from Eastern Europe. To enter into force, each of the fifteen Member States must approve the Treaty before the end of 2002. In the constitutionally-required Irish referendum, 54% were against the Treaty and 46% favored it. Many Irish voters opposed granting the EU too much power over domestic matters. Some “no” voters were seemingly unhappy about having to subsidize the economies of the new lower-income nations. Noting that tens of thousands of refugees have already come to Ireland looking for jobs, others worried that the Treaty could turn it into a deluge. Many other Irish citizens fear that the Nice Treaty would commit long-neutral Ireland to play a role in the EU’s planned 60,000-person Rapid Reaction Force. Citation: The New York Times, June 9, 2001, Late Edition -- Final, Section A, page 1, Col. 5, byline: Sarah Lyall.

Underwriters Laboratories, Inc. and Gosstandart sign agreement. Underwriters Laboratories Inc. (UL) is an American non-profit organization that evaluates products, materials and systems, such as electronic devices and medical equipment, in the interest of public safety. Successfully tested products receive the UL mark. UL recently signed a Memorandum of Understanding (MOU) with the State Committee of the Russian Federation for Standardization and Metrology (GOSSTANDART), and the Executive Board (VNIIS) of the Russian national certification Body (NCB) for electrical equipment (GOST Re). Russia requires the GOST-R compliance mark for products distributed in Russia. Based on the new MOU, UL may submit test results to GOST Re, which will then issue the GOST-R certificate of compliance. Conversely, UL may issue the U.S. mark based on GOST Re’s data. Citation: Information provided by BISNIS, U.S. Department of Commerce, “www.bisnis.doc.gov”. [Website of UL is “www.ul.com”.]

U.S. State Department implements new law on passports for minors. On July 2, 2001, the U.S. State Department will put into operation a new law on passports. Public Law 106-113 provides that any person who applies for an American passport for a child under age 14 must prove either that both the child’s parents consent to its issuance or that the applying parent has sole authority over the child. The statute aims to reduce the likelihood that one parent can obtain a juvenile passport to make possible an international child abduction. The new law also raises the minimum age at which a child can obtain his or her own passport from 13 to 14. Citation: Statement of Philip T. Reeker, Deputy Spokesman, U.S. Department of State, June 14, 2001 [See generally “http://www.state.gov”].