Private International Law

Second Period: 28 July-15 August 2014

General Course

4-15 August

Arbitration and Private International Law: George A. BERMANN, Columbia University School of Law

Special Courses

Julia Schwartz has posted ‘Super Contacts’: Invoking Aiding and Abetting Jurisdiction to Hold Foreign Nonparties in Contempt of Court on SSRN.

Under Federal Rule of Civil Procedure 65(d), district court injunctions are binding on nonparties who have notice of the order and are in active concert with the enjoined parties. Every court to address the issue has held that nonparties residing in other US jurisdictions can be held in contempt for aiding and abetting the violation of an injunction, even when they have no other contacts with the forum. Courts have held that a nonparty’s assistance in the violation of an injunction creates a “super contact” with the forum, which is sufficient to establish personal jurisdiction. Despite consensus regarding the nationwide scope of injunc-tions, whether a foreign nonparty who aids and abets the violation of an injunction can be held in contempt without any connection to the forum state remains unresolved.

Because international law concerning the enforcement of US judgments abroad is un-settled, this Comment proposes an alternative approach to determining whether a foreign nonparty who aids and abets the violation of an injunction should be subject to the court’s contempt power. There are two justifications for asserting jurisdiction over foreign nonpar-ties who knowingly assist an enjoined party in violating an injunction. First, a court’s asser-tion of “aiding and abetting jurisdiction” over a nonparty would be similar to conspiracy ju-risdiction, which courts invoke to hold foreign defendants without connection to the forum liable for the in-forum actions of their coconspirators. This approach would allow courts to establish jurisdiction whenever the substantive elements of aiding and abetting liability are met. Second, there is precedent for the enforcement of court orders against foreign nonparty subsidiaries in the discovery context. Courts considering whether a foreign nonparty subsidi-ary is bound by a discovery order assess the burdens that would result from compliance with the order and whether the order was evaded in good faith based on a conflict between the countries’ laws. These cases indicate that contempt sanctions should issue when a nonparty purposefully evades a district court injunction and there is no compelling burden justifying the evasion.

This student note is forthcoming in the Chicago Law Review.

As readers of this blog are aware, the United States Supreme Court in the recent case of Kiobel v. Royal Dutch Petroleum applied the presumption against extraterritoriality to limit the reach of the Alien Tort Statute.  In short, the Court held that the ATS did not apply to violations of the law of nations occurring within the territory of a foreign sovereign.

Today, the United States Court of Appeals for the Second Circuit issued an opinion in the case of Balintulo v. Daimler AG holding that the Kiobel decision barred a class action against Daimler AG, Ford Motor Company, and IBM Corporation for alleged violations of the law of nations in selling cars and computers to the South African government during the Apartheid era.  Rather than dismiss the case itself, the Second Circuit remanded the case to the district court to entertain a motion for judgment on the pleadings.  This case is important because it rejected the plaintiffs’ theory that “the ATS still reaches extraterritorial conduct when the defendant is an American national.”  Slip op. at 20.  It is also important because it explains that “[b]ecause the defendants’ putative agents did not commit any relevant conduct within the United States giving rise to a violation of customary international law . . . the defendants cannot be vicariously liable for that conduct under the ATS.”  Slip op. at 24.

This case as well as the Ninth Circuit’s recent decision in Sarei v. Rio Tinto (similarly dismissing an ATS suit) would seem to point to substantial contraction in ATS litigation.  But, not so fast.

A federal disctrict court in Massachussettes recently let an ATS case go forward notwithstanding Kiobel where it was alleged that a U.S. citizen in concert with other defendants took actions in the United States and Uganda to foment “an atmosphere of harsh frighenting repression against LGBTI people in Uganda.”  Sexual Minorities Uganda v. Lively, 2013 WL 4130756 (D. Mass. Aug. 14, 2013).  According to the district court, “Kiobel makes clear that its restrictions on extraterritorial application of American law do not apply where a defendant and his or her conduct are based in this country.”  This statement is plainly at odds with the Second Circuit decision.

Similarly, a federal district court in D.C. recently held that an ATS case could go forward that involved an attack on the United States Embassy in Nairobi..  Mwani v. Bin Laden, 2013 WL 2325166 (D.D.C. May 29, 2013).  This was so because, according to the district court, “[i]t is obvious that a case involving an attack on the United States Embassy in Nairobi is tied much more closely to our national interests than a case whose only tie to our nation is a corporate presence here. . . . Surely, if any circumstances were to fit the Court’s framework of “touching and concerning the United States with sufficient force,” it would be a terrorist attack that 1) was plotted in part within the United States, and 2) was directed at a United States Embassy and its employees.”  This case is now on appeal.

To be clear, these cases are in the minority of the post-Kiobel decisions.  By my count, it appears that 12 courts have dismissed ATS cases on extraterritoriality grounds and that the two cases higlighted above are the only courts to push the boundaries of the “touch and concern” language in Kiobel.

As always with ATS litigation, it will be interesting to see how the case law develops.

Joel Reidenberg, Jamela Debelak, Jordan Kovnot,  Megan  Bright, N. Cameron Russell, Daniela Alvarado, Emily Seiderman and Andrew Rosen (Fordham CLIP) have posted Internet Jurisdiction: A Survey of Legal Scholarship Published in English and United States Case Law on SSRN.

This study provides a survey of the case law and legal literature analyzing jurisdiction for claims arising out of Internet activity in the United States. A companion study, released simultaneously, explores similar issues as they are treated in the German legal system. The goal of the report is to identify trends in legal literature and case law and to serve as a comprehensive, objective resource to assist scholars and policy-makers looking to learn about the issues of jurisdiction on the Internet.

The U.S. study shows that most academic scholarship discusses all three aspects of jurisdiction law — personal jurisdiction, choice of law and jurisdiction to enforce — within the individual articles. In addition, the literature treats a noticeably wide variety of legal areas — including, for example, analyses of specific cases, particular issues related to e-commerce, and the regulation of online speech — but overall, does not appear to have a consensus on an approach or solution that cuts across the varied areas of law addressed by the scholarship. Thus, in effect, a review of academic scholarship shows that Internet jurisdiction is as varied as the legal issues and fields of law it permeates.

With respect to U.S. case law, Fordham CLIP’s research indicates that issues surrounding Internet jurisdiction gravitate toward the Ninth Circuit and the Second Circuit more so than other federal circuits. Moreover, contrary to the body of academic literature, the research demonstrates that U.S. courts predominantly adjudicate matters of personal jurisdiction in Internet cases rather than other subsets of jurisdiction, and that Internet jurisdiction issues trend toward intellectual property and defamation cases. Lastly, the case law shows that, although the Zippo and Calder decisions remain the clear, predominant legal standards and tests for Internet jurisdiction matters, when and how these rules are applied by U.S. courts lacks uniformity.