The final programme for the PIL conference at the University of Johannesburg, 8-11 Sept 09, is now available at www.uj.ac.za/law.

As recently discussed on this blog, the US Supreme Court case of Ashcroft v. Iqbal will have important ramifications for private international law cases filed in US federal courts.  That case requires that a complaint state a “plausible” claim for relief to survive a motion to dismiss.  While it is too soon to have a full sense of Iqbal‘s impact across the entire private international law field and civil litigation generally in the US, a recent Alien Tort Statute case decided by the US Court of Appeals for the Eleventh Circuit perhaps offers an important clue about where we are heading in pleading international cases in US federal courts.

In Sinaltrainal v. Coca-Cola Company, a group of consolidated plaintiffs, who were trade union leaders in Colombia, brought suit under the Alien Tort Statute (ATS) and the Torture Victims Protection Act (TVPA) alleging that their employers–two bottling companies in Colombia–collaborated with Colombian paramilitary forces (and, in one case, conspired with local police officials) to murder and torture plaintiffs.  Coca-Cola was allegedly connected to the bottlers through a series of alter ego and agency relationships, but was not alleged to be directly liable for the murder and torture; rather, the conduct was allegedly committed by paramilitary and local officials acting in concert with the local management of the bottling facilities.  The district court dismissed the case for lack of subject matter jurisdiction against the Coca-Cola defendants in Sinaltrainal I because Coca-Cola did not have the requisite control to be liable for the bottlers’ alleged actions, and in Sinaltrainal II the district court similarly dismissed the complaints against the bottlers for insufficiently pleading a conspiracy.  This appeal followed to the Eleventh Circuit.

In a nutshell, the complaint alleged that defendants conspired with paramilitary forces and/or the local police to rid their bottling facilities of unions.  As to the complaints alleging violation of the ATS, the appellate court held that the plaintiffs mere recital that paramilitary forces were in a relationship with and assisted by the Colombian government did not state a plausible allegation of state action.  Slip op. at 23.  This was so because the complaints needed to sufficiently (read plausibly) plead that “(1) the paramilitaries were state actors or were sufficiently connected to the Colombian government so they were acting under color of law (or that the war crimes exception to the state action requirement applies) and (2) the defendants, or their agents, conspired with the state actors, or those acting uncer color of law, in carrying out the tortious acts.”  Id.  Finding the war crimes exception inapplicable, this meant that plaintiffs needed to plead “factual allegations” to support their conclusion of a relationship between the paramilitary and the Colombian government, which they did not do.  Id. (noting that the complaint alleged merely that the paramilitary were “permitted to exist” and “assisted” by the Colombian government).  As to the complaint alleging conspiracy, the court held that the mere recital of an alleged conspiracy without alleging “when” the conspiracy occurred and “with whom” the conspiracy was entered into likewise fails to state a claim under the ATS.  Id. at 30.  As described by the the Eleventh Circuit, “[t]he scope of the conspiracy and its participants are undefined.”  Id.  Similar rationales were applied to the TVPA claims.  Id. at 32-33.  At bottom, the Eleventh Circuit has required clear statements of government action and clear identification of the scope and participants in an alleged conspiracy to survive a motion to dismiss in ATS and TVPA cases.

In the pre-Iqbal era, it is likely that the complaint would have survived a motion to dismiss in that there were some factual allegations that could have given rise to a cause of action.  The allegation of government action and conspiracy based on information and belief would have entitled the plaintiffs to at least some discovery in the pre-Iqbal era to prove their case.  In that Iqbal now requires heightened pleading, the Eleventh Circuit has been clear that a plaintiff must plead facts that make the allegation of unlawful conduct plausible on the face of the complaint.  In other words, plaintiffs will not have the guarantee of discovery to help make out their case.

There are important outcomes to this decision.  To begin with, it shows that the next wave of ATS litigation will be fought at the motion to dismiss phase for failure to plead plausible claims.  Rather than focusing on legal theories–for instance, whether a certain type of liability is contemplated under the ATS–courts will now be asked to focus on whether the facts alleged in plausible detail unlawful activity.  Such an approach to pleading will be tough for plaintiffs in ATS cases because plaintiffs may not have access to the facts necessary to prove such claims as conspiracy, especially given the necessity of discovery from foreign governments and officials.  This places plaintiffs lawyers in a tough position.  Even in cases where they believe under Rule 11 of the Federal Rules of Civil Procedure that the “factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery,” they may in fact not be entitled to any discovery.  As such, plaintiffs lawyers may need to think twice about filing these cases.

Second, courts are now be empowered to create heightened pleading pleading standards in ATS cases.  This means that the tide of ATS litigation may be stemmed through motions practice on factual as opposed to legal issues.

Third, it is likely that we will see Iqbal play itself out in myriad ways in international law cases generally.  The most important way is that it is now much harder to allege private international law violations in US courts because such violations frequently require court-ordered discovery to enable plaintiffs and their lawyers to investigate activities occurring abroad.

It is now clear that the new pleading regime established by the US Supreme Court is having important ramifications in international civil litigation cases in the United States.  The question, of course, is whether the new pleading standards announced by the Court are the appropriate standards for private international law cases.  Will such cases needlessly be hampered by heightened pleading standards that may well be impossible to meet in cases involving foreign goverenments, foreign governmental entities, and foreign facts?

In the period 04.09. – 21.10. 2009 this year’s Hamburg Lectures on Maritime Affairs, organised by the International Max Planck Research School for Maritime Affairs and the International Tribunal of the Law of the Sea (ITLOS), will take place in Hamburg.

The lectures feature renowned scholars and practitioners addressing current developments in the maritime field. All lectures and panel discussions are open to the public.

The schedule for the Hamburg Lectures 2009 is available here:

The latest issue (Vol. 73, No. 3) of the German law journal Rabels Zeitschrift is a special issue dedicated to the communitarisation of private international law and contains the following articles (written in English):

• Heinz-Peter Mansel: Kurt Lipstein (1909-2006)
• Jürgen Basedow: The Communitarisation of Private International Law – Introduction
• Jan von Hein: Of Older Siblings and Distant Cousins: The Contribution of the Rome II Regulation to the Communitarisation of Private International Law
• Paul Beaumont: International Family Law in Europe – the Maintenance Project, the Hague Conference and the EC: A Triumph of Reverse Subsidiarity
• Anatol Dutta: Succession and Wills in the Conflict of Laws on the Eve of Europeanisation
• Eva-Maria Kieninger: The Law Applicable to Corporations in the EC
• Stefania Bariatti: Recent Case-Law Concerning Jurisdiction and Recognition of Judgments under the European Insolvency Regulation
• Cathrin Bauer/Matteo Fornasier: The Communitarisation of Private International Law

The journal is electronically available (for a fee) here.

 The recent Australian case of Ace Insurance Ltd v Moose Enterprise Pty Ltd [2009] NSWSC 724 discusses an important question of principle concerning contractual choice of law clauses: are they promissory terms of the contract or merely declaratory of the parties’ intention?

The case arose out of class action litigation presently pending in the United States.  The class actions concern a toy developed by Moose, an Australian company, called “Aqua Dots”, which was distributed in the US but then recalled following allegations that it contains a toxic substance. 4.2 million Aqua Dots sets were recalled.  Moose is insured for personal injury claims by Ace, an Australian insurer, pursuant to an insurance policy made in Australia, containing an express Australian choice of law clause and an express Australian jurisdiction clause.  Ace at first funded and conducted the defence of the class actions on behalf of Moose but subsequently gave notice that it would cease to do so, on the basis that the policy did not cover the claims made in the class actions.

In December 2008, Moose commenced proceedings in California seeking a declaration that, as a result of the policy and Californian law, Ace is obliged to defend the actions.  In January 2009, Ace commenced proceedings in New South Wales seeking an anti-suit injunction, restraining Moose from continuing the Californian proceedings.

Brereton J granted the anti-suit injunction.  His Honour placed principal importance on the Australian jurisdiction clause in the policy, which he construed to be an exclusive jurisdiction clause though it did not use the word “exclusive”.  The fact that the the policy and the parties were connected so strongly with Australia, such that Australia was the “natural forum” for disputes, suggested that the jurisdiction clause must have been intended to do more than be merely a submission to jurisdiction.

Of perhaps greater interest was the argument by Ace that by instituting Californian proceedings for the purposes of taking advantage of Californian law, Moose had contravened an implied contractual obligation arising from the Australian choice of law clause, and that an anti-suit injunction should be issued to restrain this contravention.  This argument was founded upon the idea, developed in Adrian Briggs’ recent book, Agreements on Jurisdiction and Choice of Law (2006), at 431-464 [11.16]-[11.78], that a choice of law clause should ordinarily be considered promissory in effect.  Brereton J rejected this contention.  His Honour concluded (at [47], [51]):

No doubt a contractual provision could be framed which unambiguously contained a promise to do nothing that might result in some other system of law becoming applicable. However, in my opinion that is not ordinarily the effect of a choice of law clause, which is usually declaratory of the intent of the parties, rather than promissory. …

In our system of private international law, therefore, choice of law is about ascertaining the intention of the parties as to the legal system that is to govern their contract, not about covenants or promises that a particular legal system will apply. Where a choice of law is “inferred” rather than “express”, it is not conceivable that there would be an implied negative stipulation not to invoke the jurisdiction of a court, which would apply a law other than the chosen one. In my view, that supports the conclusion that where there is an express choice of law, there is similarly no implied obligation not to invoke the jurisdiction of a court, which will not apply the chosen law; the express choice of law is declaratory of the parties’ intention, not promissory. It may well be that the parties could frame a provision which was promissory in effect, but – given the conventional function of a choice of law clause – it would require very clear language to make it promissory rather than declaratory.

Given that the jurisdiction clause in question did not use the word “exclusive” and the amount of money likely to be at stake, it would not be surprising if Moose appeals to the Court of Appeal.