Author Archives: Charles Kotuby

Another Alien Tort Statute Case Moving Forward

A few weeks back, the Unite States Court of Appeals for the Fourth Circuit revived an Alien Tort Statute case that was at first dismissed in Kiobel’s wake. The four plaintiffs in Al Shimari v. CACI Premier Technology Inc. are foreign nationals who allege that they were tortured and otherwise mistreated by American civilian and military personnel while detained at Abu Ghraib prison on Iraq. The plaintiffs allege that employees of CACI—a private, U.S.-based defense contractor— “instigated, directed, participated in, encouraged, and aided and abetted conduct towards detainees that clearly violated the Geneva Conventions, the Army Field Manual, and the laws of the United States.” Based on the decision in Kiobel, the district court dismissed all four plaintiffs’ ATS claims, concluding that the court “lack[ed] ATS jurisdiction over Plaintiffs’ claims because the acts giving rise to their tort claims occurred exclusively in Iraq, a foreign sovereign.”

The Fourth Circuit reversed, adopting a narrow read of the Kiobel decision. As noted before on this site, the Supreme Court in Kiobel said that “even where [ATS] claims touch and concern the territory of the United States, they must do so with sufficient force to displace the presumption against extraterritorial application.” Reading this directive, the Fourth Circuit:

“observe[d] that the Supreme Court used the phrase ‘relevant conduct’ to frame its ‘touch and concern’ inquiry, . . . [and] broadly stated that the ‘claims,’ rather than the alleged tortious conduct, must touch and concern United States territory with sufficient force. [This] suggest][s] that [lower] courts must consider all the facts that give rise to ATS claims, including the parties’ identities and their relationship to the causes of action, [when assessing whether the presumption is overcome].”

“The Court’s choice of such broad terminology,” according to the Circuit, “was not happenstance.” The “clear implication” is that “courts should not assume that the presumption categorically bars cases that manifest a close connection to United States territory. Under the ‘touch and concern’ language, a fact-based analysis is required in such cases to determine whether courts may exercise jurisdiction over certain ATS claims.”

In this case, the plaintiffs’ claims allege acts of torture committed by United States citizens who were employed by an American corporation which has corporate headquarters located in Virginia. These employees were hired in the United States; the contract was concluded in the United States; and CACI invoiced the U.S. government in the United States. Finally, the plaintiffs allege that CACI’s managers located in the United States were aware of reports of misconduct abroad, attempted to “cover up” the misconduct, and “implicitly, if not expressly, encouraged” it.

These facts dictated a different result that Kiobel, even if the tortious acts occurred abroad, so the case was remanded to the District Court for further proceedings on the merits. Like Doe v. Nestle in the Ninth Circuit, and other cases discussed on this site, the ATS is far from dead.

“Judgments on Awards” in “Secondary Jurisdictions”: The D.C. Circuit Decision in Commisimpex v. Congo

Over fifteen years ago, on the 40th anniversary of the of the New York Convention, Jan Paulsson wrote that it was high time for the Convention “to discover its full potential.” See Paulsson, Enforcing Arbitral Award Notwithstanding Local Standard Annulments, 6 Asia Pac. L. Rev. 1 (1998). He “propose[d]” that “the annulment of an award by the courts in the country where it was rendered should not be a bar to enforcement elsewhere unless the grounds of that annulment were ones that are internationally recognized.” In his view, an “enforcement judge . . mak[es] a decision which will have practical consequences on resources located in his or her jurisdiction,” and need not take another enforcement court’s assessment of local or even international standards as “controlling.”

This week, before the United States Court of Appeals for the D.C. Circuit, we see somewhat of an opposite scenario. A party wins an international arbitration in Paris in 2000. It successfully enforces the award in London in 2009—thus making that award an English judgment. But the creditor is unable to collect on the judgment in England, and pivots west to the United States. But the three-year statute of limitations has run under the Federal Arbitration Act (“FAA”), meaning that the award can’t be enforced there. The applicable statute of limitation for foreign judgments, however, is 10 years, so it seeks to enforce that instrument instead. Though Professor Paulsson says that each enforcement court must make its own decision on the enforceability of foreign arbitral awards, does the conversion of that award into a national court judgment take it out of the arbitration context altogether? Stated more bluntly, can a litigant “launder” the award in this manner?

Earlier this year, the District Court said no. In its view, enforcement of a judgment pregnant with an arbitral award “would create an obstacle to the accomplishment and execution of the full purposes and objectives” of the FAA and the New York Convention which it sought to codify. In its view, the “maneuver” attempted by the award-judgment-creditor here would “outsource[e]” the question of timeliness to litigants and foreign states and “upset the balance between promoting arbitration, on the one hand, and protecting potential defendants’ interest in finality,” on the other.

Just last week, the D.C. Circuit disagreed. Siding with the United States as amicus curiae, and prior decisions of the Second Circuit—the only other court to address the issue—it observed that “the overriding purpose of [the] FAA . . . is to facilitate international commercial arbitration by ensuring that valid arbitration agreements are honored and valid arbitral awards are enforced. . . . [The purpose] is not undermined — and frequently will be advanced — through recourse to parallel enforcement mechanisms that exist independently of the FAA.” “Although an arbitral award and a court judgment enforcing an award are closely related, they are nonetheless distinct from one another, and that distinction has long been recognized.” In a nod to Professor Paulsson’s view, the Circuit acknowledged that England is a “secondary jurisdiction” with respect to the French arbitral award, so its decisions “have ‘no preclusive effect’ in recognition proceedings in the United States.” But in this context, the U.S. court is not being asked to “automatically to accord preclusive effect to the English Court’s determinations on the Award under the Convention, but rather to assess the English Judgment under the separate (and clearly distinct) factors for judgment recognition under [state] law.”

Parallel coverage by Ted Folkman is on Letters Blogatory today, too.

Guest Post by Professor Vivian Grosswald Curran: The French Supreme Court Reverses Itself in an Islamic Veil Case in « L’Affaire Baby Loup »

Professor Curran is a Distinguished Faculty Scholar and Professor of Law at the University of Pittsburgh School of Law. The Editors are grateful for this contribution.

France’s Cour de cassation decided yesterday (June 25, 2014) in plenary session that a private day care center could terminate an employee for wearing an Islamic veil (or outward sign of another religion) where the latter contravenes company rules deemed to be reasonable and proportionate in terms of the employer’s mission. The case had made its way to the Supreme Court once before, in March of 2013. At that time, the Court had held that the employee could not be terminated because the private company’s prohibition against outward signs of religion infringed its workers’ religious freedom. A key word here is « private.» Where the employer is public, by contrast, the principle of laïcité , or secularism in the public space, is deemed to justify the absence of manifestations of religious conviction.

Yesterday, however, the Court reversed itself, finding for Baby Loup, a rare day care center open seven days a week and around the clock, so that poorer women and especially single mothers, sometimes working night shifts, can find a place for their young children. The Court approved the lower court’s finding that the restriction on religious freedom at issue was justified inasmuch as the center was a small business whose employees come into continual contact with young children and their parents, such that the day care center has a legitimate interest in trying to make parents from all backgrounds feel welcome.

A note on French procedure may be of interest. Since the Supreme Court can only in the rarest of cases directly decide the substantive result of cases, in 2013 it had remanded to the Court of Appeals for further decision-making. In France, moreover, courts of appeal need not agree with the Supreme Court in its initial ruling, and the second appellate court rejected the high court’s ruling, thus leading the plaintiff to appeal to the Supreme Court a second time, yielding yesterday’s decision.

The facts of the case beyond those mentioned above add a potentially pragmatic cast to the plaintiff’s quest. She had been an assistant manager of the day care center before taking three years of maternity leave, followed by another three years of parental leave. When she returned after six years, she asked her employer to release her from her contract through a rupture conventionnelle, which would have guaranteed her certain benefits. The company refused, saying she would have to resign. Instead, she returned to work wearing an Islamic veil, knowing that it violated the company’s rules because she had helped draft those rules. When the company then terminated her employment for violating the prohibition, she sued.

A last legal option remaining to the plaintiff is an appeal to the European Court of Human Rights. Baby Loup, meanwhile, according to press accounts, is skirting financial failure due to the accumulated costs of its legal defense.

For those who read French, the decision is Arrêt n° 612 du 25 juin 2014 (13-28.369) – Cour de cassation – Assemblée Plénière – ECLI:FR:CCASS:2014:AP00612, and is available here.

TDM Call for Papers: “Arbitration in the Middle East – Expectations and Challenges for the Future”

The volume of international business either in the Middle East or with a Middle Eastern element is increasing and many of the contracts being used provide for arbitration. While arbitration (“tahkim” in Arabic) has long-standing religious and cultural roots in the Middle East, there are a number of differences and tensions between the Western perception of arbitration and certain Islamic legal principles.

Craig Shepherd and Mike McClure issue this call for papers seeking contributions for a TDM Special to be published later this year entitled “Arbitration in the Middle East – expectations and challenges for the future”. The Special will look at some of the differences between the Western and Middle Eastern perceptions of arbitration, and will also consider expectations for the future. Some potential topics include: (a) the legislative framework to support arbitration, including new arbitration laws and regional arbitral centres; (b) whether the modern concept of arbitration can resolve Shari’a disputes; (c) the role public policy should play in relation to judicial involvement with the arbitral process and enforcement or arbitral awards; (d) whether arbitral processes or arbitral laws could or should be reformed so that arbitration better suits the needs of today’s Middle Eastern users; and (e) claims under international investment treaties arising out of regional regime change, particularly in North Africa. Contributions can focus on one or a number of countries and comparative pieces referencing a number of jurisdictions would be welcome.

Papers should be submitted on or before 30 September 2014 to the editors, with a copy to info@transnational-dispute-management.com when you submit material.

More details are available here.

TDM Call for Papers: “Dispute Resolution from a Corporate Perspective”

While companies do not enter into contracts with the expectation of becoming embroiled in litigation, disputes do occur and are part of doing business. The assumption is that disputes should be managed systemically rather than as ad-hoc events. This TDM special on dispute resolution from a corporate perspective seeks to widen and deepen the debate on issues that are central to the efficient management of disputes from a corporate perspective. The editors thus seek contributions related to any of the areas set out below but welcome other relevant contributions as well.

* Commercial Dispute Resolution – Negotiation. In order to successfully resolve commercial disputes, lawyers must possess, in addition to their legal, technical, and industry expertise, the skills to understand, predict and manage conflict through negotiation. While discussion of legal concepts and theory among the community of international dispute resolution lawyers is highly sophisticated, there is less of a debate on
negotiation and limited exchange with other disciplines researching the field of negotiation.

* Managing the cost of dispute resolution: Discussions between law firms and corporations often center on the subject of how much and how to bill, including for dispute related work. While there is an ongoing debate about whether traditional hourly rate billing creates the wrong incentives, alternative fee arrangements for dispute resolution still appear to be exceptional.

* The future of commercial dispute resolution: The arrival of “big data”, i.e., the increasing volume, velocity, and variety of data, is likely to catapult us into a world where analytics of very large data sets may allow predictions of outcomes and behavior that currently does not exist.

The editors of the special are: Kai-Uwe Karl (General Electric), Abhijit
Mukhopadhyay (Hinduja Group), Michael Wheeler (Harvard Business School)
and Heba Hazzaa (Cairo University).

Publication is expected in October 2014. Proposals for papers should be
submitted to the editors by July 31, 2014

Contact details are available on the TDM website

“Intellectual Whiplash”: One Day, Two International Cases, And Two Different Results At The U.S. Supreme Court

On December 2, 2013, the case of BG Group v. Argentina was argued at the Supreme Court. As the argument neared its end, Justice Anthony M. Kennedy quipped to Argentina’s counsel: “Your – your whole argument gives me intellectual whiplash.” Last Wednesday, when the Court released its decisions in BG Group and Lozano v. Montoya Alvarez, the same might be said back to the Court. I’m not the first commentator to feel this way.

Lozano concerned the Hague Convention on Civil Aspects of Child Abduction, which in essence says that if one parent unilaterally takes their child to another country, and the child is found within a year, the child must be automatically returned home. Otherwise, a court must consider the best interests of the child, who may have developed ties in the new country. But what to make of the clandestine parent and a child whose location could not be discovered for 16 months? Is there a principle of “equitable tolling” under the Convention, according to which the one-year period should only begin after the child’s location can be ascertained? This is certainly a familiar doctrine under U.S. law—equity tolls statutory limitations periods all the time. So as not to reward a clandestine parent, the father in the Lozano case wanted the same principle applied to his case.

The Supreme Court refused this request. The Convention, they said, was not a federal statute—it was a “contract between . . . nations”—so it would be “particularly inappropriate to deploy this background principle of American law” when interpreting it. Interpreting the Convention to preclude equitable tolling is more consistent with its text; if the drafters of the Convention had wanted the one-year period to start when the left-behind parent actually discovered where the child was, they could have easily said so. Because they didn’t, the uniquely common law notion of equitable tolling could not justify the father’s suit for automatic return.
Continue reading

University of Missouri Call for Proposals: “Judicial Education and the Art of Judging: From Myth to Methodology”

The University of Missouri is issuing a call for proposals for an upcoming works-in-progress conference as well as a call for papers for a student writing competition.  Both of these calls are affiliated with a symposium that is being convened at the University of Missouri’s Center for the Study of Dispute Resolution on Friday, October 10, 2014.

The symposium is entitled “Judicial Education and the Art of Judging:  From Myth to Methodology” and addresses a number of issues relating to the role of judges and the goals and methods of judicial education.  The symposium features the Honorable Duane Benton of the United States Court of Appeals for the Eighth Circuit as keynote speaker as well as an accomplished group of judges, academics, and judicial education experts from the United States and Canada as panelists.

The day before the symposium (Thursday, October 9, 2014), the University of Missouri will be hosting an international works-in-progress conference relating to the subject matter of the symposium, broadly interpreted.  Presentation proposals should be no more than one page in length and can include analyses that are practical, theoretical or interdisciplinary in nature.  Participants can discuss judges at the state, federal or international level, and applications from outside the United States are particularly welcomed.  Proposals for the works-in-progress conference should be directed to Professor S.I. Strong (strongsi@missouri.edu) and will be accepted until May 26, 2014.  Decisions regarding accepted papers will be made in June 2014.  Prospective attendees should note that there is no funding available to assist participants with their travel expenses. 

The University of Missouri is also organizing an international student writing competition in association with the symposium.  Papers will likely be due in August 2014, although precise details (such as the due date and the amount of any prize money associated with the competition) are still being finalized.

More information about the symposium, works-in-progress conference and student writing competition is available at the symposium website, located here.  People may also contact Professor S.I. Strong (strongsi@missouri.edu) with any questions.

Please feel free to distribute this information to anyone you believe might be interested in the symposium, works-in-progress conference or writing competition.  You are also welcome to cross-post this information on any blogs.

TDM 1 (2014) – Reform of Investor-State Dispute Settlement: In Search of a Roadmap

tdm1(2014)Edited by Jean E. Kalicki and Anna Joubin-Bret, this TDM special issue has close to 70 papers making it the largest TDM Special Issue to date. The interest in this topic, and the breadth of proposals offered by our contributors, demonstrates both the importance of holding this dialogue and the creativity of astute users and observers of the present system. It should be of interest to all international disputes lawyers. This Special Issue is particularly timely in light of the European Union public consultation on investor-state dispute settlement and the Transatlantic Trade and Investment Partnership just begun by EU Trade Commissioner Karel De Gucht.

The Table of Contents is available here.

Once More Unto the Breach of Extraterritorial Discovery under Section 1782

We’ve discussed on this site in the past the various nuances and pervasive disagreements among the U.S. federal courts regarding the scope of discovery in aid of foreign tribunals under 28 U.S.C. § 1782. The longest-running dispute is whether that statute can be used in aid of arbitral tribunals, and the scholarship on this question is rich. (See here, and here.). Another disagreement, however, just won’t go away, but hasn’t garnered nearly as much public attention: that is, whether the statute can reach documents held outside the United States.

Before the holidays, the Southern District of New York decided In re Application of Kreke Immobilien KG (S.D.N.Y. 2013), a case brought in U.S. court under § 1782 to obtain documents from Deutsche Bank for use in a German litigation. Deutsche Bank argued that the court had to deny the application because the documents in question were not kept in the United States. To be sure, the statute does not impose such a limitation, but citing Judge Rakoff’s decision in In re Godfrey, 526 F. Supp. 2d 417 (S.D.N.Y. 2007), Judge Buchwald held that the statute does indeed bar extraterritorial discovery. She therefore denied the application.

Judge Rakoff decided five years ago that the Supreme Court in Intel “implicitly assumed that evidence discoverable under § 1782(a) would be located in the United States.” But the evidence of that implicit assumption is merely dictum: “nonparticipants in the foreign proceeding may be outside the foreign tribunal’s jurisdictional reach; hence, their evidence, available in the United States, may be unobtainable absent § 1782(a) aid.” (emphasis added). “Available in the United States,” however, could mean simply that the evidence is obtainable via legal process in the United States; it need not mean that the evidence is physically located in the United States. And this seems the better reading given the metaphysical problem of determining exactly where a document is “located.” I’m not the only one to espouse that view; Ted Folkman’s recent post on the Kreke Immobilien decision seems to agree.

As Judge Buchwald noted, the federal courts are deeply split on this issue. Some courts have followed Judge Rakoff’s decision in Godfrey and read § 1782 narrowly. See, e.g., In re Sarrio S.A., No. 9-372, 1995 WL 598988 (S.D.N.Y. Oct. 11, 1995); In re Microsoft Corp., 428 F. Supp. 2d 188, 194, fn. 5 (S.D.N.Y. 2006); Norex Petroleum Ltd. v. Chubb Ins. Co. of Can., 384 F. Supp. 2d 45 (D.D.C. 2005). Other courts, however, read the statute more naturally, and hold that a court’s power under § 1782 is coextensive with the Federal Rules. Indeed, this is what the penultimate sentence of § 1782(a) says (stating that discovery should generally proceed “in accordance with the Federal Rules of Civil Procedure”). Under those Rules, a person under subpoena in the United States can be compelled to produce all documents within his “possession, custody or control,” see Fed. R. Civ. P. 45(a)(1)(A)(iii), “even if the documents are located abroad,” Tequila Centinela, S.A. de C.V. v. Bacardi & Co. Ltd., 242 F.R.D. 1, 12 (D.D.C. 2007) (emphasis added); see also Cooper Indus., Inc. v. British Aerospace, Inc., 102 F.R.D. 918, 920 (S.D.N.Y. 1984). On this basis, a number of federal courts in recent years have ordered Section 1782 discovery of documents located outside the United States when the person is found there. See, e.g, In re Eli Lilly & Co., No. 3:09MC296 (AWT), 2010 WL 2509133, at *4 (D. Conn. June 15, 2010); In re Gemeinshcaftspraxis Dr. Med. Schottdorf, No. Civ. M19-88 (BSJ), 2006 WL 3844464, at *5 (S.D.N.Y. Dec. 29, 2006); In re Hallmark Capital Corp., 534 F. Supp. 2d 951, 957 n.3 (D. Minn. 2007); In re Minatec Fin. S.À.R.L., No. 1:08-CV-269 (LEK/RFT), 2008 WL 3884374, at *4 n.8 (N.D.N.Y. Aug. 18, 2008).

Even courts who have come down between this split of authority have still applied Section 1782 and Rule 45 to reach electronically stored information accessible from within this District. In In re Veiga II, 746 F. Supp. 2d 8, 25 (D.D.C. 2010), Judge Kollar-Kotelly (who also decided Norex five years earlier) outlined the “split of authority” on the geographic scope of Section 1782; “assum[ed] there is no absolute bar to the discovery of documents located outside the United States”; but nevertheless “exercise[d] [her] discretion to decline to order the production of [physical] documents abroad.” When she did so, however, she still required the Respondent to produce all materials “located within the United States, a category that includes electronically stored information accessible from within this District.” Id. at 26 (emphasis added). Decisions like this prudently avoid the metaphysical question of where electronic materials are “located,” and still give effect to the complementary reach of Rule 45 and Section 1782.

Ultimately, this may be a question for the Supreme Court; but until then, it illustrates the sometimes-difficult intersection of judicial restraint and liberal statutory intent when it comes to extraterritorial issues.

Symeonides on Choice of Law in American Courts in 2013

Dean Symeon C. Symeonides (Willamette University – College of Law) has posted Choice of Law in the American Courts in 2013: Twenty-Seventh Annual Survey on SSRN. It is, as usual, to be published in the American Journal of Comparative Law. Here is the abstract:

This is the Twenty-Seventh Annual Survey of American choice-of-law cases. It is written at the request of the Association of American Law Schools Section on Conflict of Laws and is intended as a service to fellow teachers of conflicts law, both in and outside the United States. Its purpose remains the same as it has been from the beginning: to inform, rather than to advocate.

This Survey covers cases decided by American state and federal appellate courts from January 1 to December 31, 2013, and posted on Westlaw by midnight, December 31, 2013. Of the 1,354 cases that meet these parameters, the Survey focuses on those cases that may contribute something new to the development or understanding of conflicts law—and, particularly, choice of law. This Survey is longer than the Surveys of any of the previous 26 years because 2013 produced more, and more noteworthy, cases than any of the previous years. The following are some of the highlights:

* Five decisions of the U.S. Supreme Court holding, respectively, that: (1) The Alien Tort Statute does not apply to conduct and injury occurring entirely in another country; (2) Section 3 of the Defense of Marriage Act (DOMA), which defines “marriage” for federal law purposes so as to exclude same-sex relationships, is unconstitutional; (3) The Federal Arbitration Act trumps the provisions of the Sherman Antitrust Act; (4) The “first sale” doctrine as codified in the Copyright Act applies to copies of copyrighted works lawfully made abroad and first sold abroad; and (5) The National Voter Registration Act preempts an Arizona law that sets more stringent standard for proof of citizenship when registering to vote.
* A sixth Supreme Court decision explaining the methodology that federal courts should use when evaluating venue challenges in cases involving choice-of-forum clauses.
* Two federal appellate decisions involving piracy off the Somali coast, and several decisions involving the extraterritorial reach of federal statutes in civil and criminal cases.
* Several state court decisions striving to protect consumers, employees, and other weak parties through the few cracks left by the Supreme Court’s decisions on arbitration and choice-of-forum clauses.
* An assortment of interesting cases involving products liability, other cross-border torts, economic torts, and other tort conflicts.
* A case holding that enforcement of a Japanese tort judgment against a California Church is not “state action” triggering constitutional scrutiny under the Constitution’s Free Exercise clause, and is not repugnant to the public policy.
* A case holding that one state’s dismissal of an action on statute of limitation grounds is a dismissal “on the merits,” barring a second action on the same claim in another state.
* A case defining “habitual residence” and “wrongful” removal or retention of a child under the Hague Convention on Child Abduction.