Symeon symeonides choice of law in the american courts in 2017: thirty-first annual survey
SYMEON C. SYMEONIDES1
Choice of Law in the American Courts in 2018: Thirty-Second Annual Survey
By
SYMEON C. SYMEONIDES2
El editor agradece la generosidad del Profesor Symeon… de conceder el derecho a la Revista para la publicación del análisis de la jurisprudencia de los Estados Unidos durante 2018 en materia de conflicto de leyes.
INTRODUCTION
This is the Thirty-Second Annual Survey of American Choice-of-Law Cases.1 It is written at the request of the Association of American Law Schools Section on Conflict of Laws,2 and is intended as a service to fellow teachers and to students of Hereinafter, these Surveys are referred to only by the author’s name and the survey year.
conflicts law, both inside and outside of the United States.3 Its purpose remains the same as it has been from the beginning: to inform, rather than to advocate. Occasionally, however, small amounts of criticism or praise escape the author’s selfcensoring filters.
This Survey covers cases decided by American state and federal appellate courts during 2018 and posted on Westlaw by the end of the year. Of the 1,456 appellate 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 in particular choice of law. This year, the Survey discusses or refers to 192 cases, which amounts to 13% of the cases reviewed.
The total number of conflicts cases decided in 2018 and posted on Westlaw by December 31, 2018, was 5,242.4 Table 1, below, breaks them down into categories. More than seventy percent of these cases have been decided by federal district courts and are not covered by this Survey.
TABLE 1. CONFLICTS CASES, 2018
|
U.S. Supreme Court
|
8
|
|
llate ses
Discussed
192
|
|
Federal Courts of Appeal
|
491
|
|
|
State supreme and intermediate courts
|
957
|
Reviewed
1,456
|
|
Federal district and other federal lower courts
|
3,786
|
Not reviewed
|
|
All cases
|
5,242
|
|
The Survey proceeds in three parts. The first discusses cases involving the extraterritorial reach, if any, of federal law. The second part deals with choice of law in both interstate and international conflicts. The third part deals with the recognition of sister-state and foreign-country judgments and foreign arbitral awards. Noticeably absent from this division is a section dealing with judicial jurisdiction, which forms part of the American tripartite division of conflicts law. This Survey does not directly cover jurisdiction as such, except in years in which the Supreme Court renders a decision on this subject. This year, for better or worse, the Court has not done so.
I. THE EXTRATERRITORIAL REACH OF FEDERAL LAW
A. The Alien Tort Statute
For the subjects covered by this Survey, the most important decision of the
year was Jesner v. Arab Bank, PLC,5 in which the United States Supreme Court held, by a 5 to 4 vote, that foreign corporations may not be sued under the Alien Tort Statute (ATS).5 This decision continued the trend of curtailing the reach of the ATS, which began with the 2004 decision in Sosa v. Alvarez–Machain,6 and continued with the 2013 decision in Kiobel v. Royal Dutch Petroleum Co.7 In Sosa, the Court narrowly delineated the substantive scope of the ATS so as to include only actions for universal and obligatory norms of international law comparable to those recognized by the common law at the time of the statute’s enactment in 1789. In Kiobel, the Court circumscribed the geographical reach of the ATS by subjecting it to the presumption against extraterritoriality and holding that the presumption can be rebutted only if the claims “touch and concern the territory of the United States . . . with sufficient force.”8
In Jesner, the corporate defendant was a Jordanian bank, Arab Bank, and the plaintiffs were about 6,000 foreign victims of attacks carried out by terrorist groups during a ten-year period (1995-2005) in Israel, the West Bank, and Gaza. The plaintiffs alleged that the bank helped finance these groups through conduct that partly took place in the United States—specifically, by using its New York branch to clear dollar-denominated transactions that benefited terrorists, and otherwise facilitating the transfer of funds to the groups’ bank accounts in the Middle East. The Court could have disposed of this case by holding that the bank’s U.S. conduct was too slight to overcome the presumption against extraterritoriality. Instead, the Court majority used Jesner as the opportunity to answer the question left unanswered in Kiobel, namely whether corporations may be sued under the ATS. As noted in previous years’ surveys, all but one of the federal intermediate courts that addressed this question had answered it in the affirmative, with the Second Circuit being the lone exception.
A majority of five Supreme Court justices affirmed the Second Circuit’s judgment, but on the narrower ground that the ATS cause of action did not apply to foreign corporations. However, only two justices (Chief Justice Roberts and Justice Thomas) joined all parts of the Court’s opinion authored by Justice Kennedy, which based the dismissal primarily on the defendant’s corporate status. The remaining two justices (Alito and Gorsuch) concurred with the judgment but offered different, albeit stronger, rationales. The common rationale of all five justices was that allowing ATS suits against foreign corporations would create significant diplomatic tensions with foreign countries, such as Jordan in this case, tensions which, according to the majority’s understanding, Congress sought to avoid by enacting the ATS in 1789. Even accepting this understanding along with the overstated potential for diplomatic friction (which of course cuts both ways), it is not clear why this potential exists only with regard to foreign corporations rather than foreign defendants in general, or why the majority chose to disregard the official position of the U.S. Government, which in its amicus brief formally asked the Court to rule against immunizing corporations from ATS lawsuits.9
Another common denominator among the five justices of the majority was the premise that allowing suits against foreign corporations was tantamount to “creating” (or, in Justice Gorsuch’s words, “inventing”)10 a new cause of action. If so, then, under separation of powers principles, such creation should be left to Congress. It is true, of course, that, as originally enacted, the ATS did not by itself create a cause of action. However, as the Supreme Court noted in Sosa, this did not mean that the statute was “stillborn”11 or that it was meant “to be placed on the shelf for use by a future Congress . . . that might, some day, authorize the creation of causes of action.”12 Instead, the Court itself sanctioned the creation of such actions for violations of specific, universal, and obligatory norms of international law. Since Sosa, federal courts adjudicated dozens of ATS lawsuits against foreign corporations. Consequently, in 2018, the question was not whether the Court should grant plaintiffs a new action, but whether the Court should grant an exemption from an established cause of action solely because of the defendant’s corporate status rather than the seriousness of its conduct.
It is also true that Sosa placed ATS actions under “vigilant doorkeeping.”13 As the doorkeeper, the Court cautioned lower courts to “not recognize private claims under federal common law for violations of any international law norm with less definite content and acceptance among civilized nations than the historical paradigms familiar when [the ATS] was enacted.”15 But this doorkeeping test refers to the attributes of the norm and the defendant’s conduct, not to the defendant’s corporate or non-corporate status. In fact, Sosa’s footnote 20, on which the Jesner plurality based much of its reasoning, included rather than excluded corporations as potential ATS defendants. Read together with the text to which it was attached, that footnote stated that, in determining whether the particular international law norm “is sufficiently definite to support a cause of action,”14 “[a] related consideration is whether international law extends the scope of liability for a violation of a given norm to the perpetrator being sued, if the defendant is a private actor such as a corporation or individual.”15 This phrase placed corporations and individuals under the same umbrella of a “private actor” and juxtaposed them to state actors. It did not invite an inquiry on whether corporations should be amenable to ATS suits, as the Jesner majority assumed. Moreover, the quoted phrase was followed by citations to two cases with parenthetical phrases describing whether the implicated international law norm required state action. Again, the focus was on the attributes of the particular norm of conduct, not on the status of the defendant.
It is also true the Sosa Court admonished lower courts to be mindful of the potential implications of ATS adjudications on the conduct of foreign affairs, and to defer to the political branches in appropriate cases. But courts can comply with this admonition, both in entertaining established actions and in accepting new ones, through several other tools and doctrines that can be employed on a case-by case basis. Categorically immunizing all foreign corporations from ATS suits because of the potential of diplomatic friction in some cases is nothing short of an overkill. As the dissenting opinion pointed out, [t]he majority . . . use[d] a sledgehammer to crack a nut.”16 Indeed, Justice Gorsuch, who seemed to want to relitigate Sosa and to resurrect Justice Scalia’s dissenting opinion, would go much further. He would end what he called “ATS exceptionalism”17 and would restore what he believes to be the original meaning of the statute by prohibiting all suits by foreign plaintiffs against foreign defendants (corporate or not).18
Justice Kennedy did not go as far, but he tried to explain the immunization of foreign corporations by asking the wrong question: whether there exists a universal and obligatory norm imposing liability on corporations for violations of international law. He answered the question in the negative by, inter alia, reviewing the instruments establishing various international tribunals and pointing out that none of them have authorized jurisdiction over corporations. But as Professor Dodge noted, “this reasoning confuses limits on the jurisdiction of particular international tribunals with the substantive content of international law norms.”19 These limits are the result of the political difficulties encountered in establishing these tribunals, including (in the case of the International Criminal Court) the active opposition of the United States. They do not necessarily prove the lack of a substantive norm of corporate liability. More importantly, however, Justice Kennedy’s assumption that the ATS refers the question of who can be a defendant to international law rather than to domestic law is erroneous, both as a choice-of-law matter and as one of textual interpretation. As Justice Sotomayor pointed out in her dissenting opinion:
[B]y asking whether there is “a specific, universal, and obligatory norm of liability for corporations” in international law, . . . the plurality fundamentally misconceives how international law works and so misapplies the first step of Sosa. . . . Sosa does not . . . demand that there be sufficient international consensus with regard to the mechanisms of enforcing these norms, for enforcement is not a question with which customary international law is concerned. Although international law determines what substantive conduct violates the law of nations, it leaves the specific rules of how to enforce international-law norms and remedy their violation to states[.]20
Regarding textual interpretation, Justice Sotomayor again rightly pointed out that in the ATS grant of jurisdiction of a “civil action” for torts committed “in violation of the law of nations,” “[t]he phrase ‘of the law of nations’ modifies ‘violation,’ not ‘civil action.’”21 Thus, the ATS “requires only that the alleged conduct be specifically and universally condemned under international law, not that the civil action be of a type that the international community specifically and universally practices or endorses.”22
In the end, Justice Kennedy decided not to decide “whether the seeming absence of a specific, universal, and obligatory norm of corporate liability under international law by itself forecloses [the plaintiffs’] claims against Arab Bank, or whether this is an issue governed by international law.”23 Kennedy based the rest of his opinion on domestic law, especially on a juxtaposition of the ATS with the Torture Victims Protection Act (TVPA), which imposes liability only on natural persons. However, mixing utilitarianism with benevolence, Justice Kennedy posited that the immunization of foreign corporations will be good not only for those corporations but also for American corporations and, oddly enough, foreign plaintiffs as well. It will be good for American corporations because it will dissuade other countries from haling American corporations into their courts and subjecting them to “an immediate, constant risk of claims seeking to impose massive liability for the alleged conduct of their employees and subsidiaries around the world, all as determined in foreign courts.”24 But, in an indirect way, this will also be good for foreign victims of human rights abuses because:
allowing plaintiffs to sue foreign corporations under the ATS could establish a precedent that discourages American corporations from investing abroad, including in developing economies where the host government might have a history of alleged human-rights violations, or where judicial systems might lack the safeguards of United States courts. And, in consequence, that often might deter the active corporate investment that contributes to the economic development that so often is an essential foundation for human 25 If only plaintiffs knew what’s best for them!
To summarize, five justices subscribed to the holding that the foreign corporate defendants in Jesner were immune from an ATS suit. However, in terms of rationale, only two Justices joined the parts of Justice Kennedy’s opinion that relied on the defendant’s status as a foreign corporation.26 By contrast, three Justices joined Justice Sotomayor’s dissent, which concluded that a defendant’s corporate status is immaterial in determining liability under the ATS. Moreover, the majority did not address domestic corporations and thus its holding is limited to foreign corporations. As justice Alito noted in a footnote to his concurring opinion, “we have no need to reach the question whether an alien may sue a United States corporation under the ATS.”27
Thus, for now at least, it is possible for a foreign plaintiff to sue an American corporation under the ATS. Indeed, in Doe v. Nestle, S.A.,28 in which the defendants included both American and foreign corporations, the court dismissed the foreign corporations and allowed the case to continue against the American corporations. Analytically, this dichotomy is not easily defensible. Besides providing perverse incentives for American corporations to incorporate abroad, it means that a foreign corporation is immune from ATS suits, even if it acts in the United States and causes injury there, but an American corporation can be held liable if its conduct “touches and concerns” the United States. To be sure, the solution is not to extend Jesner’s immunization to American corporations but rather to reverse the immunization of foreign corporations. In the absence of congressional intervention, such a reversal is unlikely, but it is equally unlikely that this dichotomy will continue for long. Given the present ideological composition of the Court, it is safe to assume that, if Doe or another case involving American corporate defendants reaches the Supreme Court, the odds are that a five-member majority will find a way to rule for the defendant.29 If the Court decides to immunize domestic corporations, the paradox will be complete: under the Court’s other decisions,30 corporations possess fundamental rights that until recently were thought to belong only to human beings, but corporations will have no liability for violating the human rights of human beings. As one commentator noted, “corporations get to be people when it’s politically expedient, but they don’t have to be people when it counts.”31
Doe v. Nestle, S.A.32 is one of the few ATS cases that, for now, has survived Jesner and Kiobel. The plaintiffs were former child slaves from Mali, who were kidnaped and forced to work harvesting cocoa in the Ivory Coast. They sued several foreign and some American companies that controlled the production and processing of Ivorian cocoa, alleging that the companies were liable under the ATS for aiding and abetting child slavery in the Ivory Coast. After Jesner, the Ninth Circuit dismissed the foreign companies but, noting that “Jesner did not eliminate all corporate liability under the ATS,”33 the court proceeded to examine the claims against the American companies. After noting that under Kiobel the ATS does not apply extraterritorially, the court employed the “focus test” from RJR Nabisco, Inc. v. European Community,34 by asking whether the case involved a permissible domestic application of the ATS. The court answered the question in the affirmative, finding that the statute’s focus was on the conduct that amounted to aiding and abetting child slavery, and that conduct occurred in the United States. In the court’s words, the plaintiffs’ allegations “paint[ed] a picture of overseas slave labor that defendants perpetuated from headquarters in the United States.”35 The court remanded the case to the trial court to enable the plaintiffs to specify which aiding and abetting conduct that took place in the United States was attributable to the American defendants.
In Kaplan v. Central Bank of the Islamic Republic of Iran,36 the defendants included two foreign banks whom the plaintiffs accused of funding Hezbollah, a Lebanese militia group that carried out cross-border rocket attacks against Israel. The district court dismissed the plaintiffs’ ATS claim based on the presumption against extraterritoriality. The D.C. Circuit affirmed the dismissal based on Jesner’s holding that the ATS bars actions against foreign corporations. The court held further that this bar is a non-merits threshold ground for dismissal. Consequently, under Sinochem International Co. v. Malaysia International Shipping Corp.,37 it is permissible to dismiss a claim on this ground without first determining whether the court has personal jurisdiction over the corporate defendant.38
In Jara v. Núñez,39 the defendant was a natural person and his critical conduct did not occur in the United States. Instead, it occurred in Chile, where the defendant, as a lieutenant in the Chilean army during the Pinochet dictatorship, oversaw and participated in the torture of a Chilean political prisoner, whom he eventually shot in the head during a game of Russian roulette. Soldiers under the defendant’s supervision then shot the victim’s corpse forty times before discarding it. In 1989, one year before the end of the dictatorship, the defendant emigrated to the United States and later became an American citizen. In 2012, the victim’s wife and children discovered the defendant’s whereabouts and sued him under the ATS. In the meantime, a Chilean court indicted him for torture and murder, but the United States refused to extradite him to Chile.
As the above facts indicate, the defendant was the paradigmatic torturer who, in the words of the Supreme Court in Sosa “has become—like the pirate and slave trader before him—hostis humani generis, an enemy of all mankind.’”40 As Justice Breyer noted in his four- member concurrence in Kiobel, cases such as this one fall within the reach of the ATS because “preventing the United States from becoming a safe harbor (free of civil as well as criminal liability) for a torturer or other common enemy of mankind” is an “important American national interest.”41
However, the Eleventh Circuit, which has never shown any sympathy for ATS actions,42 had a different view. The court specifically rejected the plaintiffs’ argument regarding the American interest in not providing a safe haven for torturers and instead underscored the fact that all of the defendant’s conduct had occurred in Chile before he became an American citizen. The court compared this case with two previous cases in which the same court refused to apply the ATS against American defendants who acted in the United States in aiding and abetting in the commission of human rights violations in Colombia by, inter alia, financing the terrorist groups that carried out the violations. Compared to those cases, the court concluded, the plaintiffs’ complaint in this case “could [not] possibly implicate a more substantial policy interest.”43 Perhaps so, but what is wrong with this comparison is not the conclusion but the basis of comparison.44
B. The Fourth and Fifth Amendments and Cross-Border Shootings
Two federal appellate cases decided in 2018 involved cross-border shootings by U.S. Patrol officers, the Fourth and Fifth Amendments of the Constitution, and the availability of a Bivens private right of action against the officer.45 The two cases were remarkably similar in that, in both of them, a U.S. Border Patrol officer standing on the American side of the U.S.- Mexico border shot and killed a Mexican boy standing on the Mexico side of the border. However, as explained below, the two courts reached antithetical results. In the first case, Hernandez v. Mesa,46 the Fifth Circuit held that the boy was not entitled to the protection of the Fourth Amendment and his parents were not entitled to a Bivens action under the Fifth Amendment. In the second case, Rodriguez v. Swartz,47 the Ninth Circuit held that the boy was entitled to the protection of the Fourth Amendment and his parents were entitled to a Bivens action against the officer.
Hernandez v. Mesa has a much longer procedural history. In two decisions discussed in the 2014 and 2015 Surveys,48 the Fifth Circuit dismissed the parents’ actions under the Federal Tort Claims Act, the ATS, and the Fourth Amendment and, as noted above, held that the parents were not entitled to a Bivens action under the Fifth Amendment. In the 2018 case discussed here, the court, sitting en banc, reaffirmed its denial of a Bivens remedy, following remand from the U.S. Supreme Court. The Supreme Court had tagged this case onto another case, Ziglar v. Abbasi,49 in which the Court refused to allow a Bivens action against policymaking officials involved in terror suspect detentions following the 9/11 attacks but remanded the case for determining whether a Bivens action might still be maintained against a prison warden. In so doing, the Court abandoned the “ancien regime” governing Bivens actions and announced a “new regime” in which new actions are distinctly “disfavored.”50 The Court enunciated a two-prong test (hereinafter the Abbasi test), according to which, before allowing a Bivens action, lower courts should consider (1) whether the circumstances present a “new context” (as compared to previous cases where the Court has allowed such actions), and (2) whether “special factors,” especially separation of powers principles, counsel against creating an action against a federal officer.51
Applying the first prong of the test, the Fifth Circuit found that the cross-border character of this incident presented a new context because: (a) the Supreme Court held, in United States v. Verdugo–Urquidez,52 that the Fourth Amendment did not apply to a search of a Mexican house by American law enforcement agents; and (b) to grant a Bivens remedy in this case would require extending the Supreme Court’s Boumediene decision53 to a territory beyond the United States’ de facto and de jure control. Both reasons miss the obvious point: the officer was standing on the U.S. side of the border when he pulled the trigger. Obviously, the Fifth Circuit has a different understanding of what extraterritoriality means. For example, the court stated that “[a]n extraterritorial Bivens extension is ‘doctrinally novel’” because “the Supreme Court has never created or even favorably mentioned a non-statutory right of action for damages on account of conduct that occurred outside the borders of the United States.”54
Turning to the second prong of the Abbasi test, the Fifth Circuit found several “special factors” (albeit all derived from separation of powers principles) counseling against allowing a Bivens action and concluded that this was “not a close case.”55 The court reasoned, inter alia, that “extension of Bivens” would “threaten[] the political branches’ supervision of national security,”56 “undermine the Border Patrol’s ability to . . . deter and prevent the illegal entry of terrorists,”57 and “risk[] interfere[ing] with foreign affairs and diplomacy.”58
In a comprehensive and strong dissent, Judge Prado wrote that the majority was “led astray . . . by empty labels of national security, foreign affairs, and extraterritoriality,” which he characterized as “all hat, no cattle.”59 In particular, the majority “overlook[ed] the critical who, what, where, when, and how of the lead actor . . . in the United States . . . shot and killed an unarmed, fifteen-year-old Mexican boy standing a few feet away.”60 Judge Prado noted that this case had nothing to do with terrorism or national security and little to do with border security. After pointing out that, under established precedents, Border Patrol agents are unquestionably subject to Bivens suits when they commit constitutional violations on U.S. soil, Judge Prado said that it was not sensical “to argue that a suit against a Border Patrol agent who shoots and kills someone standing a few feet beyond the U.S. border implicates border and national security issues, but . . . that those concerns are not implicated when the same agent shoots someone standing a few feet inside the border.”61 He concluded by quoting approvingly from an academic author’s observation that “national security” justifications are “increasingly becom[ing] the rule in contemporary civil litigation against government officers” and threaten to “dilute the effectiveness of judicial review as a deterrent for any and all unlawful government action—not just those actions undertaken ostensibly in defense of the nation.”62
In Rodriguez v. Swartz,63 the facts, as alleged by the plaintiffs, were similar to Hernandez, but more shocking. The defendant, a U.S. Border Patrol agent on the American side of the U.S.-Mexico border shot and killed J.A., a sixteen-year-old Mexican boy who was peacefully walking down a Mexican city street that runs parallel to the border.
Without warning or provocation, [the defendant] fired somewhere between 14 and 30 bullets across the border at J.A., and he hit the boy, mostly in the back, with about 10 bullets. J.A. was not committing a crime. He did not throw rocks or engage in any violence or threatening behavior against anyone or anything. And he did not otherwise pose a threat to [defendant]or anyone else.64
The Ninth Circuit held that, under these circumstances, the boy had a Fourth Amendment right to be free from the unreasonable use of deadly force. The court distinguished this case from Verdugo–Urquidez, which, as noted above, held that the Fourth Amendment did not apply to a search of a Mexican house by American law enforcement agents. The court noted that, “unlike the American agents in VerdugoUrquidez, who acted on Mexican soil, [the defendant] acted on American soil. Just as Mexican law controls what people do there, American law controls what people do here. Verdugo-Urquidez simply did not address the conduct of American agents on American soil.”67
The court acknowledged that in Hernandez the Fifth Circuit had held the Fourth Amendment inapplicable, but disagreed with the Fifth Circuit’s erroneous focus on search warrants. This case was “not about searches and seizures,” said the Ninth Circuit, and thus did not present any “practical obstacles” (such as those involving extraterritorial warrants) to the application of the Fourth Amendment.65 Instead, this case was “about the unreasonable use of deadly force by a federal agent on American soil.”66 Thus, “[a]pplying the Constitution in this case would simply say that American officers must not shoot innocent, non-threatening people for no reason.”67 The use of deadly force was unreasonable under the Fourth Amendment because the victim “was not suspected of any crime . . . was not fleeing or resisting arrest . . . [a]nd he did not pose a threat of harm to anyone at all.”68
Along similar lines, the court held that the officer was not entitled to qualified
immunity and then discussed the plaintiff’s entitlement to a Bivens action against the officer.
After a comprehensive and thoughtful discussion applying the Abbasi test, the court concluded that there were no “special factors” counseling against allowing a Bivens action in this case. In particular, the court found that this case: (1) was “not about policies or policymakers” but rather was about “standard law enforcement operations” and “individual instances of . . . law enforcement overreach”;69 (2) did not implicate national security;70 and thus (3) allowing a Bivens action “would not have problematic foreign policy implications.”71
Finally, responding to the dissent, the court noted that the presumption against extraterritoriality was rebutted in this case because the defendant’s conduct more than “‘touch[ed] and concern[ed] the territory of the United States . . . with sufficient force.”72 After all,
[The defendant] was an American agent acting within the scope of his employment. [His] bullets crossed the border, but he pulled the trigger here. We have a compelling interest in regulating our own government agents’ conduct on our own soil. Presumably, that is why the United States was willing to apply its criminal law “extraterritorially” in charging [defendant] with homicide, even while simultaneously arguing that the presumption against extraterritoriality precludes the Bivens claim here because the injury happened a few feet onto the other side of the border. A damages remedy against an officer for unconstitutional misconduct strengthens the set of disincentives that deter it.73
C. Anti-Terrorism Act
The Anti-Terrorism Act (ATA) provides a private cause of action and treble damages for U.S. citizens harmed “by reason of an act of international terrorism.”74 In Owens v. BNP Paribas, S.A.,75 the plaintiffs were U.S. citizens who were injured, or the survivors of citizens who died, as a result of the 1998 bombing of the U.S. embassies in Kenya and Tanzania. They sued a French bank, alleging that it provided financial assistance to Sudan, which in turn funded and otherwise supported al Qaeda, which carried out the attacks. The ATA applies extraterritorially, but the plaintiffs’ problem was to show a causal link between the bank’s assistance to Sudan and their injuries. Specifically, the plaintiffs had to show that the bank’s acts were a substantial factor in the sequence of events that led to their injuries and that those injuries were reasonably foreseeable as a natural consequence of the bank’s conduct. The court found that the plaintiffs were unable to make such a showing. Consequently, they were ineligible for an ATA remedy because they were unable to show that they were injured “by reason of an act of international terrorism.”
The court also considered the effect of the Justice Against Sponsors of Terrorism Act (JASTA),76 which was enacted in 2016. JASTA provides victims with “the broadest possible basis . . . to seek relief against [those] that have provided material support, directly or indirectly, to foreign organizations or persons that engage in terrorist activities against the United States.”77 JASTA amended the ATA, which now provides for aiding and abetting liability and establishes a lower standard for proving it than the showing of a causal link between the defendant’s acts and the plaintiffs’ injuries. However, the amended version applies to injuries that have occurred “on or after September 11, 2001.”78 The court held that the amendment was not declaratory or interpretative of pre-existing law and thus did not apply to the plaintiffs’ injuries, which occurred in 1998.
D. Hostage Taking Act
The Hostage Taking Act (HTA) prescribes penalties for hostage taking, inter alia, when it takes place outside the United States if the hostage or the hostage taker is a U.S. national.79 In United States v. Noel, 80 the hostage taking took place in Haiti, the offender was a Haitian national, and the hostage was a U.S. national. The offender challenged his conviction under the HTA, arguing, inter alia, that: (1) the prosecution did not prove that he knew that his victim was an American citizen; (2) Congress intended the HTA to apply to acts of terrorism and not to a street crime like his when committed by a foreigner in a foreign country; (3) Congress did not have the constitutional power to enact the HTA; and (4) in any event, the HTA violated the Due Process Clause. The Eleventh Circuit rejected all four arguments.
The court rejected the first argument, reasoning that the defendant was not required to know that his victim was an American citizen because, based on the phrasing of the HTA, the requirement that the victim be an American is purely jurisdictional and, when a statute is silent as to mens rea, it is sufficient to prove general intent. The court rejected the defendant’s second argument, reasoning that, although the HTA’s primary focus was on terrorism, the text of the Act is broad and precise enough to cover garden-variety kidnapping. Regarding the third point, the defendant argued that the only constitutional clause that authorizes Congress to punish offences committed abroad was the Offences Clause,81 which however was inapplicable in this case because his offence was not piracy, was not committed on the high seas, and was not an offence against the Law of Nations. The court responded that, because the HTA implements the International Convention Against the Taking of Hostages, Congress derived its power to enact it from the Treaty Power of Article II and the Necessary and Proper Clause of Article I.82 The court also rejected the defendant’s due process argument, reasoning that the Treaty provided global notice to the world that hostage taking was a crime that can be prosecuted in any signatory country of which the hostage is a citizen, regardless of where the crime occurred. In this case both the United States and Haiti were parties to the Treaty. Finally, the court addressed the defendant’s last argument that, in the absence of a significant American interest, such a notice was insufficient to satisfy due process. The court concluded as follows:
Assuming arguendo that some significant state interest in addition to such global notice is required, we believe the fact that the hostage was a United States citizen satisfies any such requirement. Protection of our own citizens abroad is obviously an important interest of the United States. And protection from the crime of being taken as a hostage abroad is a significant interest. The United States has clearly expressed this significant interest in signing the Treaty, and in passing the legislation, [the HTA], to implement the Treaty.83
E. Securities Exchange Act
Section 10(b) of the Securities Exchange Act of 1934 (SEA) makes it unlawful “[t]o use
or employ, in connection with the purchase or sale of any security . . ., any manipulative or
deceptive device or contrivance” in contravention of the rules established by the Securities Exchange Commission for the protection of investors.84 In Morrison v. National Australia Bank Ltd.,85 the Supreme Court held that the presumption against extraterritoriality renders the SEA applicable to deceptive conduct only to “transactions in securities listed on domestic exchanges[] and domestic transactions in other securities.”86 However, the Court did not elaborate on what constitutes a “domestic transaction.” In Giunta v. Dingman,87 the Second Circuit reiterated the test previously established in Absolute Activist Value Master Fund Ltd. Ficeto,88that “domestic transactions,” are “those involving securities in which (1) irrevocable liability is incurred in the United States, or (2) title passes within the United States.”89In Stoyas v. Toshiba Corporation,90 the Ninth Circuit held that that the over-the- counter market through which the plaintiffs purchased American Depository Shares or Receipts (“ADRs”) was not a “stock exchange” within the meaning of the SEA and thus did not qualify as a “national exchange” within the meaning of Morrison.
F. Commodities Exchange Act
The Commodities Exchange Act (CEA) proscribes the use of “any manipulative or deceptive device or contrivance” in connection with a futures contract and prohibits the manipulation of the price of a futures contract.91 Following Morrison, lower courts have held that the CEA is subject to the presumption against extraterritoriality and thus it applies only to “domestic transactions,” which courts applying the SEA have defined as transaction in which “irrevocable liability is incurred or title passes within the United States.”92 In Myun– Uk Choi v. Tower Research Capital LLC,93 the Second Circuit extended this definition to CEA cases. The question in this case was whether a series of certain complex “night market” purchases by Korean plaintiffs qualified as “domestic transactions.” The plaintiffs would place their orders through the Korea Stock Exchange (KRX) when the KRX is closed for business, whereupon their orders were quickly matched with a counterparty by an electronic trading platform (“CME Globex”) located in the United States. The trades would then be cleared and settled on the KRX when it opened for business the following morning. The defendants argued that the trades were not domestic U.S. transactions because they became final only when they were settled the following morning on the KRX in South Korea.
The Second Circuit disagreed. The court noted that the plaintiffs plausibly alleged that KRX night market trades bind the parties on matching because matches on the CME Globex are essentially binding contracts, which parties are required to honor. If these allegations were true, then the court would conclude that the parties incurred “irrevocable liability” upon matching on the CME Globex in the United States, and thus the trades qualified as domestic transactions subject to the CEA. The court remanded the case to the district court instructing it to make the necessary determinations.
G. Copyright Act
Spanski Enterprises, Inc. v. Telewizja Polska, S.A.94 involved the novel question of whether an infringing performance that originates abroad but ultimately reaches viewers in the United States can be actionable under the Copyright Act.95 In this case, the plaintiff acquired from the defendant, a Polish television broadcaster (Polska TV) the exclusive rights to show the defendant’s programs in the United States (and all of the Americas). Pursuant to the acquisition agreement, Polska—which makes its programs publicly available through a video-on-demand feature on its Polish website— employed technology known as geoblocking that blocked viewers in the United States from gaining access to the programs. The plaintiff, who had registered its exclusive rights with the U.S. Copyright Office, sued the defendant for infringement, alleging that despite the geoblocking, the defendant’s programs were still accessible the United States through video streaming directly from the defendant’s website. The District court found that 51 of defendant’s programs were viewed in the United States in this way, and that their accessibility was the result of “volitional” acts by Polska employees.
The legal question was whether the Copyright Act applied under these circumstances. Both the district court and the Court of Appeals answered this question in the affirmative under the “focus test” adopted in Morrison and RJR Nabisco.96 Under this test,
If the conduct relevant to the statute’s focus occurred in the United States, then the case involves a permissible domestic application even if other conduct occurred abroad; but if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory.97
Relying on the italicized word “conduct,” Polska argued that its conduct took place in Poland and thus was outside the focus of the Copyright Act. To avoid this result, the court had to find that the critical conduct was the showing of the 51 programs “on computer screens in the United States.”98 The court reasoned as follows:
Guided by the Supreme Court’s methodology, we identify the conduct relevant to the Copyright Act’s focus by asking precisely what it is that the Act regulates. The answer is clear: the Act grants copyright holders several exclusive rights—among them, the right to perform a copyrighted work publicly—and effectuates those rights by prohibiting infringement . . . of those “exclusive rights.” The Copyright Act “focuses,” then, on policing infringement or, put another way, on protecting the exclusivity of the rights it guarantees. Here, although it was in Poland that TV Polska uploaded and digitally formatted the fifty-one episodes, the infringing performances—and consequent violation of Spanski’s copyrights—occurred on the computer screens in the United States on which the episodes’ images were shown. Accordingly, because the conduct relevant to the statute’s focus occurred in the United States, this case “involves a permissible domestic application” of the Copyright Act, even if other conduct occurred abroad.99
The court correctly held for the plaintiff, but in this author’s opinion, all of this circuitous if not artificial reasoning would have been unnecessary if the court were to follow the much simpler “effects test” last applied in an antitrust case, Hartford Fire Ins. Co. v. California.100 According to that test, American law (in that case the Sherman Act) applies when foreign conduct is intended to produce and does produce detrimental effects in the United States. This test would have produced the same result as the focus test, but in a more direct and logical way. The court seemed to echo this logic when it concluded as follows:
Congress had good reason to allow domestic copyright holders to enforce their rights against foreign broadcasters who direct infringing performances into the United States. Given the ease of transnational internet transmissions, a statutory scheme that affords copyright holders no protection from such broadcasters would leave the door open to widespread infringement, rendering copyright in works capable of online transmission largely nugatory.101
H. Patent Act
Section 271(f)(2) of the Patent Act provides that a company “shall be liable as an infringer” if it “supplies” certain components of a patented invention “in or from the United States” with the intent that they “will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States.”102 In WesternGeco LLC v. ION Geophysical Corp.,103 a case involving a patented system for surveying the ocean floor, the defendant unquestionably violated this provision. The defendant manufactured the components for its competing system in the United States and then shipped them to companies abroad. In turn, those companies combined the components to create a surveying system indistinguishable from the plaintiff’s patented system. Applying section 284 of the Act, which authorizes “damages adequate to compensate for the infringement,”104 the lower court awarded plaintiff damages consisting, inter alia, of lost profits from foreign sales. The defendant could not challenge the application of section 271(f)(2), which clearly applied on all fours, but argued that section 284 did not apply extraterritorially and thus the court should not have awarded damages for foreign sales.
The Supreme Court rejected the argument in a brief 7-to-2 opinion authored by Justice Thomas. The Court began with the two-step test developed in Morrison and RJR Nabisco but decided to skip step one, in which one determines whether the particular statutory provision applies extraterritorially. The Court reasoned that “addressing step one would require resolving difficult questions that do not change the outcome of the case, but could have far-reaching effects in future cases.”105 The Court then applied step two in which one examines whether the conduct relevant to the statute’s focus occurred in the United States, in which case the statute applies to that conduct, even if other conduct occurred abroad. The Court noted that, in determining the focus of a statute, “we do not analyze the provision at issue in a vacuum” and, “[i]f the statutory provision at issue works in tandem with other provisions, it must be assessed in concert with those other provisions.”106 Indeed, this is entirely logical, although it seems to contradict Justice’s Alito’s reasoning in RJR.
Nabisco, which was based on a section-by-section determination of the statute’s focus.107 In this case, Justice Thomas reasoned, § 284 worked in tandem with § 271(f)(2). Section 284 provides that the court shall award damages “adequate to compensate for the infringement.” In this case, the infringement occurred in the United States when the defendant exported the components in violation of § 271(f)(2) which prohibits precisely such an export. In the Court’s words, “the focus of § 284, in a case involving infringement under § 271(f)(2), is on the act of exporting components from the United States” and, consequently, “the lost-profits damages that were awarded to [plaintiff] were a domestic application of § 284.”
Justice Gorsuch filed an extensive dissent. He argued that, although U.S. patents have no effect outside the United States, the award of damages for foreign sales essentially turns
U.S. patents into worldwide patents. Justice Gorsuch reasoned that, by not explaining why damages for a domestic infringement should include damages for harm from noninfringing foreign uses, “the Court ends up assuming that patent damages run (literally) to the ends of the earth. It allows U.S. patent owners to extend their patent monopolies far beyond anything Congress has authorized and shields them from foreign competition U.S. patents were never meant to reach.”108
In M-I Drilling Fluids UK Ltd. v. Dynamic Air Ltda.,109 the question was whether a federal court in Minnesota had specific jurisdiction over a foreign company that infringed on five U.S. patents by manufacturing abroad and installing infringing equipment on two offshore oil drilling rigs. The oil rigs were located in international waters, but they flew the American flag and thus were in some respects part of U.S. territory. In fact, the defendant conceded that that U.S.-flagged ships are U.S. territory for the purposes of patent law. Jurisdiction was asserted on the basis of Rule 4(k)(2) of the Federal Rules of Civil Procedure, which allows a federal court to exercise jurisdiction over a defendant if (1) the plaintiff’s claim arises under federal law, (2) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction, and (3) the exercise of jurisdiction comports with due process. In general, the assertion of jurisdiction comports with due process if the defendant has sufficient contacts with the United States as a whole rather than with the state in which the district court sits. The Court of Appeals for the Federal Circuit held that the district court had jurisdiction consistent with due process. A concurring opinion elaborated on the status of U.S.-flagged ships and the application of U.S. patent law on the high seas.
I. Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act (FCPA) contains several provisions that apply extraterritorially, but also delineates expansively yet precisely the categories of persons who fall within its scope.110 In United States v. Hoskins,111 the defendant was one of the persons who fell outside the scope of the FCPA, although he acted in concert with persons who were subject to it. He was a nonresident foreign national, acting outside American territory, who lacked an agency relationship with a U.S. person, and was not an officer, director, employee, or stockholder of an American company. The court held that, under these circumstances, the
U.S. Government could not use theories of conspiracy and complicity under the general conspiracy statutes to charge the defendant with violating the FCPA. “In other words,” said the court, “a person [cannot] be guilty as an accomplice or a co-conspirator for an FCPA crime that he or she is incapable of committing as a principal.”112 As other courts have held, “the extraterritorial reach of an ancillary offense like aiding and abetting or conspiracy is coterminous with that of the underlying criminal statute.”113 In this case, “[t]he government may not expand the extraterritorial reach of the FCPA by recourse to the conspiracy and complicity statutes.”114
J. RICO
In RJR Nabisco, the Supreme Court held that, in order to prevail in a private action under the Racketeer Influenced and Corrupt Organizations Act (RICO),115 the plaintiff “must allege and prove a domestic injury to its business or property.”116 The Court did not define the term “domestic injury” because the plaintiffs had waived their claims for injuries in the United States. However, the Court provided some hints by referring to the place in which an injury was suffered.117 Since then, lower courts have struggled to provide more precise content to this term. Two approaches seem to be emerging in the district courts. The first one, sometimes referred to as the “locus of effects” approach, looks at the place where the plaintiff felt the effects of the alleged injury (usually the plaintiff’s domicile or principal place of injury) and not where the injurious acts were allegedly committed. The second approach gives more consideration to the place that the alleged misconduct “targeted” or at which it was “directed.”
Last year’s Survey discussed the first case to reach an appellate court, Bascuñán v. Elsaca,118 in which the Second Circuit held that a Chilean plaintiff had suffered a domestic injury because his bearer shares and money, which the court treated as tangible property, were located in the United States when the defendant embezzled them. This year two more appellate cases involved the same question. In the first case, Armada (Singapore) PTE Limited v. Amcol International Corp.,119 the plaintiff was a Singapore shipping company that alleged that the Illinois-based defendant violated RICO by thwarting the plaintiff’s attempt to recover on its breach of contract claim. The Seventh Circuit held, without much discussion, that because the plaintiff’s principal place of business was in Singapore, “any harm to [the plaintiff’s] intangible bundle of litigation rights was suffered in Singapore.”120 Consequently, the “injury [was] not domestic,”121 and the plaintiff was not entitled to a RICO action.
In the second case, Humphrey v. GlaxoSmithKline PLC,122 a Chinese plaintiff alleged that the defendants’ misconduct, which occurred in or directed at the United States caused the loss of the plaintiff’s good will and customers in the United States. The Third Circuit held that the plaintiff’s injury occurred in China and thus it was not a domestic injury for RICO purposes. At first glance, this result appears identical to the result the Seventh Circuit reached in Armada because both cases applied the law of the plaintiff’s principal place of business. However, in Humphrey, the Third Circuit based that result not only on that contact but also on the presence of several additional contacts with China. In fact, the Third Circuit repeatedly underscored that the inquiry is “particularly fact-sensitive,” it “requir[es] consideration of multiple factors,” and that “no one factor is presumptively dispositive.”123 Moreover, the Third Circuit criticized the Seventh Circuit’s approach not only as too simplistic but also as functionally undesirable, reasoning as follows:
Armada’s residency-based rule also effectively precludes all foreign plaintiffs alleging intangible injuries from recovering under [RICO] regardless of their alleged connection with the United States. It cannot be the case that the mere fact that a loss is economic means that foreign corporations are unable to avail themselves of the protections of civil RICO, even in cases where all of the actions causing the injury took place in the United States. There is no evidence that Congress meant to so preclude foreign corporations from the protection offered by [RICO] and doing so conflicts with the Supreme Court’s recognition that “Congress did not limit RICO to domestic enterprises.124
K. Anti-Drug Trafficking Statutes
Since RJR Nabisco was decided, five circuits courts have applied its extraterritoriality analysis in determining the reach of criminal statutes.125 In one of these cases, United States
- Vasquez,129the U.S. Government took the position that RJR Nabisco does not apply to criminal cases. The Fifth Circuit rejected that position, noting that RJR Nabisco involved RICO, which in large part is a criminal statute. Vasquez involved two criminal statutes 21 U.S.C. § 848(b)(1)(A), which defines and punishes certain drug trafficking crimes, and 21 U.S.C. § 848(e)(1)(A), which punishes killing while engaged in the crimes defined in § 848(b)(1)(A). The court held that because § 848(b)(1)(A) clearly applied extraterritorially, so did § 848(e)(1)(A).
The Maritime Drug Law Enforcement Act (MDLEA)126 applies extraterritorially and, inter alia, allows the U.S. Coast Guard to intercept and board stateless ships in international waters. In United States v. Ruiz-Murillo,127 the court reaffirmed several previous holdings that Congress’s power to enact the MDLEA derives from the Felonies Clause, which permits the government to prosecute crimes occurring on the high seas.128 The court also held that the conduct proscribed by the MDLEA need not have a nexus to the United States because universal and protective jurisdiction principles support its extraterritorial reach.
In United States v. Obando,133 the question was whether the intercepted foreign vessel was stateless. Under the MDLEA, a vessel is stateless if it is not “flying its nation’s ensign or flag”129 and the master does not make a verbal claim of nationality or registry. In this case, the master did not make such a claim and the vessel did not literally “fly” any flag. However, painted on its hull was a flag that looked like the flag of Colombia or Ecuador, which are identical (except that the Ecuadorian flag has a coat of arms). Because of this similarity, the Coast Guard contacted the Ecuadorian authorities which responded that the vessel was not registered in Ecuador. The court discussed at great length the question of whether a painted flag is the same as a flown flag under the MDLEA and eventually answered the question in the negative.
L. Foreign Sovereign Immunities Act
In Rubin v. Islamic Republic of Iran,130 the Supreme Court held that a collection of ancient Persian artifacts (the Persepolis Collection) owned by Iran and housed at the University of Chicago were not subject to attachment in satisfaction of a judgment that the plaintiffs obtained under the terrorism exception to the Foreign Sovereign Immunities Act (FSIA).131 The FSIA grants jurisdictional immunity to foreign states and their agencies and instrumentalities and grants their property immunity from attachment in satisfaction of judgments against them. However, both grants are subject to exceptions. In this case, the plaintiffs’ action against Iran fell within the terrorism exception to jurisdiction provided in § 1605A of the FSIA. The question was whether the Persian artifacts were subject to attachment under § 1610(g), which provides that property of a foreign state against which a judgment was rendered under the terrorism exception “is subject to attachment . . . as provided in this section.”132
The answer to this question (on which the intermediate courts were divided) depended on whether the phrase “as provided in this section” in § 1610(g) applied only to § 1610(g), as the plaintiffs argued, or to the entire § 1610, as the defendant argued. If the former, the artifacts would be subject to attachment. If the latter, the plaintiffs would have the difficult task of affirmatively demonstrating that the property falls under one of the enumerated categories for which attachment is available. In a unanimous opinion authored by Justice Sotomayor and based largely on textual interpretation, the Court affirmed a judgment for the defendant, reasoning that § 1610(g) did not provide a free-standing basis for attachment but must be read together with the rest of § 1610.
Several other appellate cases involved suits against foreign states or foreign officials133 filed under the jurisdictional exceptions to foreign sovereign immunity, including the terrorism exception,134 the commercial activity exception,135 and the expropriation exception.136 Space limitations do not allow a discussion of these cases here, but interested readers may follow the citations in the footnotes.
M. Indian Tribe Immunity
Upper Skagit Indian Tribe v. Lundgren137 implicated the immunity of an Indian Tribe, which of course is not covered by the FSIA.138 The Upper Skagit Indian Tribe purchased a 40-acre tract of land adjacent to its reservation in the State of Washington. A boundary survey indicated that a fence that served as part of the boundary of the purchased tract was erroneously positioned, leaving about one acre outside it. The possessors of that one-acre filed a quiet title action claiming adverse possession and mutual acquiesce, to which the Tribe responded by asserting sovereign immunity. Relying on County of Yakima v. Confederated Tribes and Bands of Yakima Nation,144 the Washington Supreme Court rejected the immunity claim and held for the plaintiffs, reasoning that sovereign immunity did not apply in cases of in rem jurisdiction.
The United States Supreme Court found that Yakima was the wrong authority for resolving this case. The Court rejected the plaintiffs’ request to decide the case on the basis of the common-law doctrine of sovereign immunity, according to which a sovereign did not have immunity from actions involving immovable property located in the territory of another sovereign. The Court noted the existence of conflicting views regarding the immunity of Indian tribes and expressed some uncertainty on whether doctrines developed in the context of foreign sovereign immunity are transferable to Indian Tribe immunity. Rather than resolving these questions, the Court decided to remand the case to the Washington courts for their first take.
Chief Justice Roberts and Justice Kennedy concurred in result but thought that principles of foreign sovereign immunity provided a good starting point from which the Court itself could decide the case. Justice Thomas, joined by Justice Alito, filed a strong dissent, reasoning that this was not even a close question and that the Court should have affirmed the pro-plaintiff decision below “based on the immovable property exception to sovereign immunity . . . [which] is settled, longstanding, and obviously applies to tribal immunity.”145 The exception, said Justice Thomas, “is a corollary of the ancient principle of lex rei sitae,” which provides that “land is governed by the law of the place where it is situated.”146 After describing the role and scope of the situs rule from Bartolus, to Savigny, to Kent, and to the present, Justice Thomas explained why the property exception to sovereign immunity applies to Indian Tribes with even greater force than to foreign sovereigns.
II. CHOICE OF LAW
A. Proof of Foreign Law
In Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. Ltd,147 the Supreme Court addressed the question of what weight must a federal court accord to a foreign government’s representation about its own law. In a unanimous opinión written by Justice Ginsburg, the Court held that a federal court “should accord respectful consideration to a foreign government’s submission, but is not bound to accord conclusive effect to the foreign government’s statements.”139 In so holding, the Court vacated a contrary decision of the Second Circuit, which was discussed in the 2016 Survey,140 and resolved a split among the circuits.141
Animal Science was an antitrust dispute between Chinese manufacturers of Vitamin C and American buyers. The buyers alleged that the manufacturers engaged in conduct in China (horizontal price-fixing) that produced anticompetitive effects in the United States in violation of the Sherman Act. Without contesting the facts, the manufacturers moved for dismissal under the act of state doctrine, the foreign sovereign compulsion doctrine, and principles of international comity. The manufacturers alleged that the Chinese Government required them to engage in price fixing. The Chinese Ministry of Commerce filed an amicus curiae brief, which confirmed that the Ministry required the manufacturers to engage in the particular conduct as part of a plan to facilitate China’s transition from a state–run command economy to a market– driven economy, while ensuring that China remained a competitive participant in the global Vitamin C market. The District Court denied the defendants’ motion to dismiss. The court noted that, although the Ministry’s amicus brief was entitled to “substantial deference,” it was not “conclusive,”142 and was “too ambiguous to foreclose further inquiry into the voluntariness of [the Chinese sellers’] actions.”143 After undertaking its own inquiry, the court concluded that the price-fixing was voluntary and held for the buyers.
The Second Circuit reversed. The court reasoned that, when a foreign government directly participates in a U.S. court proceeding and submits a “reasonable” statement explaining the meaning and effect of its laws, the court “is bound to defer” to that statement and should “not embark on a challenge to a foreign government’s official representation.”144 After finding that the Ministry’s statement was “reasonable” and disregarding evidence submitted by the buyers, the court concluded that Chinese law mandated the defendants’ price-fixing and held that the complaint should have been dismissed under the aforementioned doctrines invoked by the defendants.
The Supreme Court held that the Second Circuit’s “highly deferential”145 and “unyielding”146 rule was inappropriate and inconsistent with the letter and spirit of Federal Rule of Civil Procedure 44.1, which “fundamentally changed”156 the common law’s treatment of foreign law as a question of fact and now requires that it be treated as a question of law. Rule 44.1 “free[d] courts ‘to reexamine and amplify material . . . presented by counsel in partisan fashion or in insufficient detail.’”147 The Rule provides that, in determining foreign law, a court “‘may consider any relevant material or source . . . whether or not submitted by a party’”158 and “‘may engage in its own research and consider any relevant material thus found.’”148 Under this standard, the Second Circuit’s treatment of the foreign government’s submission was unduly deferential. The Supreme Court reiterated that, although “[i]n the spirit of international comity” federal courts should “carefully consider a foreign state’s views about the meaning of its own laws,” they are “neither bound to adopt the foreign government’s characterization nor required to ignore other relevant materials.”149
The fact that Rule 44.1 permits an independent judicial inquiry into foreign law does not mean that it requires it—at least when the parties do not invoke foreign law, or they rely on the wrong foreign law. G and G Productions LLC v. Rusic150 is one of many cases that reiterate this point. In this case, which is discussed later in this Survey,151 the plaintiff relied on a certain article of the Italian Civil Code and lost in the district court. In the court of appeals, the plaintiff changed its theory, invoked another article of the same code, and blamed the district court for not relying on the other article. In the plaintiff’s words, “it is the court, not the litigants, which must get it right” and “the District Court simply got it wrong.”152
The Ninth Circuit’s response was sharp: “judges are not like pigs . . . hunting for truffles.”153 Rule 44.1 “speaks exclusively in terms of permission, not prescription,”154 said the court. The court “may consider any relevant material or source . . . whether or not submitted by a party,”155 but the court is by no means obligated to do so. The appropriate reading of Rule 44.1 is that a party relying on foreign law “has an obligation to raise the specific legal issues and to provide the district court with the information needed to determine the meaning of the foreign law.”156 A party that fails to carry this “information burden” waives the right to rely on foreign law and, although that party “may get saved by the court’s own research efforts,”157 the court has no obligation to come to the rescue. Moreover, the court concluded, “[a]bsent exceptional circumstances,” courts do “not consider arguments raised for the first time on appeal.”158 In this case, the plaintiff’s “unexplained failure to raise an argument that was indisputably available below is perhaps the least ‘exceptional’ circumstance” warranting a judicial rescue.159
Adeleye v. Driscal160 was decided by a state court in Texas, a state that, like most other states, has adopted rules that are virtually identical to federal Rule 44.1. The trial court held that the parties were validly married in a proxy marriage in Nigeria. The husband appealed, arguing that the trial court erred in allowing the wife’s expert on Nigerian marriage law to testify despite the fact the wife did not timely identify him as an expert witness. The court of appeals rejected the argument, holding that the husband failed to preserve this issue for appellate review because he did not file “a timely . . . objection, or motion in the trial court.”161 The husband also argued that the trial court erred in applying Nigerian law because the wife failed to provide proper notice of her intention to offer evidence on Nigerian law and failed to provide sufficient evidence to establish that law. The appellate court acknowledged that the applicable Texas rule required “notice in the pleadings or other reasonable written notice,”162 but again held that the husband failed to preserve the issue and thus he “forfeited” the right to complain on appeal.163 Finally, the husband argued that the wife’s evidence of Nigerian law was insufficient and thus, under an occasionally invoked fiction, the court “should have assumed the law of Nigeria is the same as the relevant law of Texas.”164 The appellate court did not question the wisdom of the fiction or its applicability in this case. Instead, the court held that the husband failed to provide specific and sufficient evidence to demonstrate that the wife’s evidence was insufficient.
Estate of Obata165 is one of the cases in which the court went the extra mile in delving into foreign law. The case involved a type of a Japanese extrajudicial adult adoption known as yōshi-engumi. In order to explain the effect of this type of adoption under Japanese law, the California court also explained the concept of a “house” as a social unit, and did so by not only analyzing extensive excerpts from the Japanese civil code and other Japanese statutes but also by resorting to, and quoting extensively from, books on history, politics, and social anthropology. It is unclear whether the parties supplied these materials or whether the court located them through its own research. Either way, this case stands out as a commendable, albeit infrequent, example of how one should strive to understand the social context of foreign institutions.
B. Anti-Foreign Law Amendments
As discussed in previous years’ Surveys, around a dozen states have adopted constitutional amendments that, subject to some exceptions, prohibit courts from applying foreign law.166 This movement began in 2010 with Oklahoma’s overtly antiMuslim amendment and continued with sanitized but equally xenophobic versions targeting international and foreign law in general. Alabama is one of those states. Its amendment provides, inter alia, that “the public policy of Alabama is to prohibit anyone from requiring Alabama courts to apply and enforce foreign laws,”167 and that “[a] court . . . shall not apply or enforce a foreign law if doing so would violate any state law or a right guaranteed by the Constitution of this state or of the United States.”168
Ex parte Continental Motors, Inc.169 is the first case involving this amendment to reach the Alabama Supreme Court. The case arose out of an airplane crash in Honduras that caused the death of two Honduran citizens and one Guatemalan citizen. The victims’ survivors filed wrongful death actions in Alabama against the manufacturers of the plane’s engine and starter assembly. The case proceeded to trial under Honduran law, which the plaintiffs conceded was applicable under Alabama’s lex loci delicti rule. However, during the pendency of the action, Alabama adopted the antiforeign law amendment quoted above. Neither party challenged the constitutionality of the amendment under the federal Constitution; instead, both parties relied on it. The first to do so were the plaintiffs. They argued that, because of the amendment, “Alabama law, rather than Honduran law, should be applied to the plaintiffs’ wrongful-death action.”170 The defendants argued that none of the plaintiffs had been appointed as personal representative of the decedents’ estates and, thus, none had the authority, under Alabama law, to file a wrongful-death action. The lower court ruled that the constitutional amendment required the application of Alabama law and ultimately dismissed the defendants’ motions for summary judgment.
The Alabama Supreme Court did not at all question the applicability or constitutionality of the amendment. The court stated: that “[w]hether an individual has the authority to pursue a wrongful-death action is a question of substantive law”; that, before the amendment, it was “undisputed that the substantive law of Honduras, not Alabama, applied at the time the original complaint was filed”;171 and that the defendants “ma[d]e no argument that the plaintiffs failed to comply with Honduran law.”172 After the amendment, however, Alabama law became applicable, and, “under Alabama law, only those plaintiffs listed in the complaint who are personal representatives of the decedents may pursue the wrongful-death action.”173 At the time of the initial complaint, the plaintiffs did not qualify as “personal representatives,” but the court examined whether they so qualified later when they filed their amended complaint. After a long technical discussion, the court answered the question in the affirmative with regard to one of the victims and in the negative with regard to the other two.
Leaving aside the technical and arguably procedural question of who can bring the wrongful death action, one cannot help but wonder which law will the court apply when it reaches the merits of this products liability/wrongful death action. Will the court follow the dictates of its lex loci delicti rule and apply Honduran products liability law, which is likely to favor the American defendants? Or will the court feel bound by the constitutional amendment to apply Alabama law, which is likely to favor the foreign plaintiffs? After all, “the public policy of Alabama . . . prohibit[s] anyone from requiring Alabama courts to apply and enforce foreign laws,”174 and Alabama courts “shall not apply or enforce a foreign law if doing so would violate any [Alabama] state law.”175 Would it not be ironic if one of the amendment’s collateral effects is the abolition of the lex loci delicti rule, which the Alabama court has zealously followed for more than a century!
C. Choice-of-Law Methodology
Table 2, below, depicts the judicial following of the various choice-of-law approaches in the fifty states, the District of Columbia, and the Commonwealth of Puerto Rico. Because there have been no changes from last year, this table is the same as the 2017 table and is reproduced here for the readers’ convenience. It should be read with all the caveats expressed in the previous surveys.
TABLE 2. ALPHABETICAL LIST OF STATES AND CHOICE-OF-LAW METHODOLOGIES FOLLOWED
|
States
|
Traditional
|
Significant Contacts
|
Restatement (Second)
|
Interest Analysis
|
Lex Fori
|
Better Law
|
Combined Modern
|
|
Alabama
|
T+C
|
|
|
|
|
|
|
|
Alaska
|
|
|
T+C
|
|
|
|
|
|
Arizona
|
|
|
T+C
|
|
|
|
|
|
Arkansas
|
|
C
|
|
|
|
T
|
|
|
California
|
|
|
|
T
|
|
|
C
|
|
Colorado
|
|
|
T+C
|
|
|
|
|
|
Connecticut
|
|
|
T+ C?
|
|
|
|
|
|
Delaware
|
|
|
T+C
|
|
|
|
|
|
Dist. of Columbia
|
|
|
|
T
|
|
|
C
|
|
Florida
|
C
|
|
T
|
|
|
|
|
|
Georgia
|
T+C
|
|
|
|
|
|
|
|
Hawaii
|
|
|
|
|
|
|
T+C
|
|
Idaho
|
|
|
T+C
|
|
|
|
|
|
Illinois
|
|
|
T+C
|
|
|
|
|
|
Indiana
|
|
T+C
|
|
|
|
|
|
|
Iowa
|
|
|
T+C
|
|
|
|
|
|
Kansas
|
T+C
|
|
|
|
|
|
|
|
Kentucky
|
|
|
C
|
|
T
|
|
|
|
Louisiana
|
|
|
|
|
|
|
T+C
|
|
Maine
|
|
|
T+C
|
|
|
|
|
|
Maryland
|
T+C
|
|
|
|
|
|
|
|
Massachusetts
|
|
|
|
|
|
|
T+C
|
|
Michigan
|
|
|
C
|
|
T
|
|
|
|
Minnesota
|
|
|
|
|
|
T+C
|
|
|
Mississippi
|
|
|
T+C
|
|
|
|
|
|
Missouri
|
|
|
T+C
|
|
|
|
|
|
Montana
|
|
|
T+C
|
|
|
|
|
|
Nebraska
|
|
|
T+C
|
|
|
|
|
|
Nevada
|
|
C
|
T
|
|
|
|
|
|
New Hampshire
|
|
|
C
|
|
|
T
|
|
|
New Jersey
|
|
|
T
|
|
|
|
C
|
|
New Mexico
|
T+C
|
|
|
|
|
|
|
|
New York
|
|
|
|
|
|
|
T+C
|
|
North Carolina
|
T
|
C
|
|
|
|
|
|
|
North Dakota
|
|
T
|
|
|
|
|
C
|
|
Ohio
|
|
|
T+C
|
|
|
|
|
|
Oklahoma
|
C
|
|
T
|
|
|
|
|
|
States
|
Traditional
|
Significant Contacts
|
Restatement (Second)
|
Interest Analysis
|
Lex Fori
|
Better Law
|
Combined Modern
|
|
Oregon
|
|
|
|
|
|
|
T+C
|
|
Pennsylvania
|
|
|
|
|
|
|
T+C
|
|
Puerto Rico
|
|
T+C
|
|
|
|
|
|
|
Rhode Island
|
C
|
|
|
|
|
T
|
|
|
South Carolina
|
T+C
|
|
|
|
|
|
|
|
South Dakota
|
|
|
T+C
|
|
|
|
|
|
Tennessee
|
C
|
|
T
|
|
|
|
|
|
Texas
|
|
|
T+C
|
|
|
|
|
|
Utah
|
|
|
T+C
|
|
|
|
|
|
Vermont
|
|
|
T+C
|
|
|
|
|
|
Virginia
|
T+C
|
|
|
|
|
|
|
|
Washington
|
|
|
T+C
|
|
|
|
|
|
West Virginia
|
T
|
|
C
|
|
|
|
|
|
Wisconsin
|
|
|
|
|
|
T+C
|
|
|
Wyoming
|
|
|
T+C
|
|
|
|
|
|
TOTAL 52
|
Torts 9
Contr. 11
|
Torts 3
Contr. 5
|
Torts 25
Contr. 24
|
Torts 2
Contr. 0
|
Torts 2
Contr. 0
|
Torts 5
Contr. 2
|
Torts 6
Contr. 10
|
C. Contracts
1. Contracts with Choice-of-Law Clauses
a. Choice of Procedural and Conflicts Law
One well-established principle of conflicts law is that, ordinarily, a choice-oflaw clause includes only the chosen state’s substantive or internal law—not its conflicts law and not its procedural law.176 However, the rationale for the two exclusions is different: the exclusion of conflicts law is a matter of contractual intent, whereas the exclusion of procedural law is arguably a matter of contractual power. Also different is the scope of these exclusions, depending on whether the choice-of-law clause chooses the law of the forum state (“inbound” clause) or the law of another state (“outbound” clause).
- Exclusion of Conflicts Law
First, although an inbound choice-of-law clause excludes the choice-of-law rules of the forum state, that exclusion covers only rules other than those whose application is necessary for determining the validity of the clause itself. For example, if the forum state follows § 187 of the Restatement (Second) for assessing the enforceability of choice-of-law clauses, an inbound choice-of-law clause cannot displace that section.
Banta Oilfield Services, Inc. v. Mewbourne Oil Company177 involved this issue. A Master Service Agreement (MSA) between a Texas company, the defendant, and a New Mexico company, the plaintiff, contained a Texas forum selection clause and a choice-of-law clause providing that all disputes arising from the MSA were to be governed by “the substantive laws of the State of Texas, excluding any conflict of law or choice of law principles.”178 The MSA also contained an indemnification agreement, which was valid under Texas law but arguably invalid under New Mexico law. The New Mexico plaintiff argued that, under the choice-of- law clause and its exclusionary phrase italicized above, the court should apply the substantive law of Texas, without any choice-of-law analysis. As the plaintiff put it, “Because Texas is . . . the forum and because the forum’s conflicts laws apply by default, the parties necessarily intended to preclude any choice-of-law analysis that would point away from applying Texas substantive law to their contractual disputes.”179
The Texas court did not really respond to this argument but ignored it in substance because it proceeded to a full-fledged examination of the choice-of-law clause under § 187 of the Restatement (Second), which is followed in Texas.180 The court was right to reject the argument, albeit sub silentio. Accepting the argument that parties have the power to exclude the application of § 187 or its equivalent would deprive courts from the ability to scrutinize inbound choice-of-law clauses and would make all such clauses automatically enforceable without any scrutiny. However, subject to this sole exception, all other choice-of-law rules, be they those of the forum state or another state, are displaceable, at least in the American tradition, and thus they can be excluded by the parties’ agreement, in this case the choice-of- law clause.
Second, as noted above, the principle that ordinarily a choice-of law clause does not include the chosen state’s choice-of-law rules is a matter of contractual intent rather than contractual power. It is, in other words, simply a rule of interpretation. It is based on the inherently logical assumption that parties who had the foresight to address in advance the choice-of-law issue in hopes of thereby preventing litigation or make it more predictable also intended to avoid the uncertainties of the choice-of-law process and, in the case of outbound choice-of-law clauses, the complexities of renvoi. However, this assumption is rebuttable by evidence of contrary contractual intent. This is why the more precise statement of this principle is to say that, unless the parties provide otherwise, a choice-of-law clause does not include the chosen state’s choice-of-law rules.181 If, for whatever sensible or nonsensible reason, the parties want their choice to extend to the “whole law” of the chosen state and they provide to that effect, it would be inconsistent with the very principle of party autonomy to disregard the choice.
- Exclusion of Procedural Law
On the other hand, the exclusion of the chosen state’s procedural law from the scope of the choice-of-law clause is, at least arguably, a matter of contractual power rather than contractual intent. This is consistent with the principle that the law of the forum governs matters of procedure, a principle that prevails over the principle of party autonomy. Indeed, it would not be sensible or practical to allow the parties to impose on a court the burden of complying with the rules of conducting a trial or other purely procedural rules of another state. In other words, unlike choice-of-law rules, the procedural rules of the forum state are not displaceable. To be sure, the line between substance and procedure is neither always clear nor the same in all states. Statutes of limitation are the prime example of this uncertainty or diversity of opinion. Nevertheless, for rules that are unquestionably procedural, there is reason to question whether the parties should be free to displace them. If this is correct then, an outbound choice-of-law clause may not include the chosen state’s procedural law (and thus cannot displace the forum state’s procedural law) and an inbound choiceof-law clause should have no effect on the forum’s procedural law because that law applies on its own force regardless of the parties’ wishes.
a. Choice-of-Law Clauses and Statutes of Limitation
1. Inbound Clauses
Four 2018 cases that raised some of the above questions involved inbound choice-of- law clauses and a statute that arguably would qualify as both a procedural rule and a choice- of-law rule—the forum state’s borrowing statute. The first case, 2138747 Ontario, Inc. v. Samsung C & T Corporation,182 presented an additional wrinkle in that the choice-of-law clause included the procedural law of New York, the forum state. An Ontario plaintiff sued a New York defendant for breach of a contract that contained both a New Yew York choice-of- law clause and a mandatory New York forum selection clause. The parties agreed with the decision of New York’s intermediate court, which had interpreted the choice-of-law clause as encompassing both the substantive and the procedural law of New York.183 New York is one of the states that continues to follow the procedural characterization of statutes of limitation. Under New York’s six-year statute of limitation, the action would be timely, but would be barred by Ontario’s two-year statute. However, New York’s borrowing statute, if applicable, would mandate the application of Ontario’s shorter statute because the action accrued in Ontario. Thus, the outcome depended on the characterization, and hence the applicability, of the New York borrowing statute. 184
The plaintiff argued that the borrowing statute did not apply because, “as any statute that may require the application of the law of another state,” the borrowing statute was essentially a choice-of-law rule.195 Consequently, under general choiceof-law principles which were recently reaffirmed in two New York cases—Ministers & Missionaries Benefit Bd.185; IRB–Brasil Resseguros, S.A. v. Inepar Invs., S.A.186,187—the statute fell outside the scope of the choice-of-law clause. The New York Court of Appeals rejected this argument as overbroad and inconsistent with the history of the borrowing statute. The court distinguished this case from the two previous cases in that the choice-of-law clauses in those cases “chose only New York’s substantive law.”188 By contrast, the clause in this case extended to New York’s procedural law and this included the borrowing statute, which the court characterized as an “abiding part”188 and “a stable fixture of New York’s procedural law.”200
In fact, what distinguishes this case from the previous two cases is not the fact that the choice-of-law clause included New York’s procedural law. Rather it is the fact that— unlike the New York statutes involved in those cases which qualified as veritable choice-of- law rules—the borrowing statute involved in this case is an inseparable appendage of New York’s statutes of limitation, which New York characterizes as procedural. If one accepts the court’s conclusion that a borrowing statute is not a choiceof-law rule despite having a certain choice-of-law function, then its application is inevitable, regardless of whether the inbound choice-of-law clause does or does not include the forum’s procedural law. If, as in this case, the clause includes the forum’s procedural law, then the borrowing statute applies as part of that law. If, as in most cases, the choice-of-law clause chooses only the forum’s substantive law, then the statute applies as part of the forum’s procedural law, which remains applicable despite the choice-of-law clause.189
The other three 2018 cases involving a similar scenario—Federated Capital Corporation v. Deutsch,190 Federated Capital Corp. v. Abraham,191 and Federated Capital Corp. v. Nazar192— were litigated in Utah, a state that also follows the procedural characterization of statutes of limitation. In these cases, the inbound choice-of-law clauses did not purport to include the forum’s procedural law, but the contracts also contained inbound forum selection
clauses, which could be interpreted as the parties’ consent, if one were needed, to the application of the forum’s procedural law. A Michigan credit card company sued three credit card holders domiciled in states other than Utah for defaulting on credit card debts that were payable in Pennsylvania. The actions were timely under Utah’s six-year statute of limitation but were barred by Pennsylvania’s four-year statute. The lower court held that the actions were barred because the Utah borrowing statute mandated the application of Pennsylvania’s shorter statute. The court of appeals affirmed and also awarded attorney fees to the credit card holders under Utah law.
2. Outbound Clauses
SunTrust Bank v. Ritter193 involved an outbound choice-of-law clause and a statute-of- limitation conflict. A loan contract between a Georgia bank and a Tennessee borrower contained a Florida choice-of-law clause. When the borrower defaulted, the bank sued in Tennessee. The action was timely under Tennessee’s six-year statute of limitation but untimely under Florida’s five-year statute. Relying on the choice-oflaw clause, the trial court held the action barred under the Florida statute. The court of appeals reversed. The court noted that, “[a]lthough Tennessee will honor the parties’ choice of law for substantive matters, Tennessee law governs matters of procedure.”194 After explaining why “statutes of limitation are considered procedural matters”195 in Tennessee, the court held that the Tennessee statute applied, and the action was timely.196
In Professional Collection Consultants v. Lujan,197 another case involving an outbound choice-of-law clause and a statute of limitation conflict, the action was filed in California, a state that has abandoned the procedural characterization of statutes of limitation.198 A credit card agreement between a Delaware bank and a California domiciliary contained a Delaware choice-of-law clause. The action against the defaulting credit card debtor was timely under California’s four-year statute of limitation but untimely under Delaware’s three-year statute. Relying on the choice-of-law clause, the court held that the action was untimely under the Delaware statute. Like most courts before it,199 the California court rejected the bank’s argument that the court should also apply Delaware’s tolling statute, which suspended the running of time for as long as the debtor was outside Delaware and could not be served with process. The court reasoned as follows:
Because [the debtor] is not susceptible to suit in Delaware, applying the tolling provision would produce the absurd result of abolishing the statute of limitations defense entirely, which is surely inconsistent with a fundamental policy of California law. Because Delaware’s tolling provision is not inherent in, or inseparable from, its statute of limitations . . . our refusal to adopt Delaware’s non-resident tolling statute does not prevent us from enforcing Delaware’s statute of limitations.200
Finally, in Deloitte Tax LLP v. Amedisys, Inc.,201 an accounting malpractice case that also involved an outbound choice-of-law clause, the action was timely under the peremptive period202 of the forum state, Louisiana, but untimely under a shorter contractual period that was valid under the law of the chosen state, New York, but not Louisiana. The court refused to apply the contractual period, after finding that: (1) in the absence of the choice-of-law clause, Louisiana law would have been applicable because of Louisiana’s significant contacts and interests;203 and (2) the application of New York law would violate Louisiana’s strong public policies of regulating the provision of accounting services in Louisiana, protecting the public from accountant malpractice, and not allowing the contractual shortening of the statutory peremptive period.
C. Plain Choice-of-Law Clauses
This section discusses cases in which the contract contained a “plain” choiceof-law clause that did not present the complications discussed in the preceding section. For convenience, it is divided into cases in which the clause pointed to a state other than the forum (outbound clause) and those in which the clause pointed to the forum state (inbound clause).
1. Outbound Clauses
In Skywaves I Corporation v. Branch Banking and Trust Company,204 the issue was the enforceability of a clause waiving the right of trial by jury. The clause was part of a factoring agreement between a South Carolina plaintiff and a North Carolina defendant. The agreement also contained a North Carolina choice-of-law clause. The jury waiver clause was enforceable under South Carolina law but not under North Carolina law. The South Carolina court held that the plaintiff was entitled to a jury trial, reasoning as follows:
[Although] the right to a jury trial is a procedural issue, the issue here is not the question of the right to a jury trial but rather, the enforceability of a contract provision. Because this is a question of contract validity, and South Carolina courts generally uphold choice of law provisions, North Carolina law applies to determine the validity and enforceability of the contractual waiver of the right to a jury trial. Furthermore, North Carolina’s policy of finding contractual jury trial waivers unenforceable is not void as against South Carolina public policy.205
In Prospect Funding Holdings, LLC v. Saulter,206 an Illinois court held that a loan contract containing a Minnesota choice-of-law clause was invalid as “champertous” under Minnesota law, thus leaving the lender who had drafted the contract and the clause without a remedy. The lender, Prospect, was in the business of financing lawsuits by lending money to be paid from the proceeds of the judgment or settlement. The borrower, Angela Wright– Housen (AWH), was plaintiff in a wrongful death action. The loan contract, which was titled “purchase agreement” apparently to avoid regulation under laws governing loans, was accompanied by two letters: (1) an irrevocable “letter of direction” signed by AWH and instructing her Illinois attorney, Saulter, to pay Prospect before disbursing any proceeds to her; and (2) a letter signed by Saulter in which he agreed to abide by the letter of direction. The wrongful death lawsuit was settled but neither Saulter nor AWH paid Prospect, who then sued both of them in Minnesota. The Minnesota court rendered a default judgment against AWH but held that it did not have jurisdiction over Saulter and, because he was not a signatory to the loan, the Minnesota forum selection clause contained therein was not binding on him.
Unable to collect from AWH, Prospect sued Saulter in Illinois arguing that the two letters obligated him to pay Prospect. The problem was that, not being a signatory to or addressee of either letter, Prospect was no more than a third-party beneficiary and thus its rights depended on the validity of the loan contract, which the letters accompanied. Turning to that question but without discussing Minnesota’s contacts, the court held that, under the choice-of-law clause, Minnesota law governed the contract’s validity. Minnesota, unlike Illinois, followed the old common-law rule prohibiting contracts for champerty, which a Minnesota case defined as “‘[a]n agreement between a stranger to a lawsuit and a litigant by which the stranger pursues the litigant[’s] claims as consideration for receiving part of any judgment proceeds.’”207 This case did not quite fit this definition because Prospect did not “pursue the litigant’s claims.” However, another Minnesota case spoke of “the ill effects of a contract that gives a stranger a contingent interest in the outcome of litigation” and noted that these effects “go well beyond encouraging people to sue or direct control of the litigation.”208 They create a disincentive to settle disputes and permit strangers to profit from the litigation of others, while avoiding regulations applicable to lenders. After pointing out that, in addition to being champertous, the loan was usurious under Minnesota law, the Illinois court held it unenforceable under Minnesota law.
The court did not discuss any countervailing Illinois policy, but apparently it shared the concerns regarding usury because, as the concurring judge pointed out, the loan was usurious under both Illinois and Minnesota law. It charged an interest rate of over 60%, when the permissible rate was 9% in Illinois and 8% in Minnesota. This factor, along with the contracting parties’ unequal position and the fact that AWH was not a party to this litigation, may explain why the court’s holding goes against existing authority, such as the Restatement (Second), which provides that when the chosen law invalidates the whole contract, the choice-of-law clause should be disregarded as the result of mutual error.209
In American Family Mutual Ins. Co. v. Cintas Corporation No. 2,210 the issue was the enforceability of an indemnification provision in a Wisconsin building-management contract containing an Ohio choice-of-law clause. Under Wisconsin law, indemnification agreements that, like the one involved in this case, required the indemnitor to indemnify the indemnitee for the indemnitee’s negligence required a heightened level of clarity to be enforceable (“strict construction” rule). Ohio did not have such a requirement. The Wisconsin Supreme Court held, over a strong dissent, that this difference did not rise to a fundamental policy difference sufficient to defeat an otherwise valid choice-of-law clause.
In Berry and Berry Acquisitions, LLC v. BFN Properties LLC,211 the Oklahoma Supreme Court held enforceable a Texas choice-of-law clause in a contract between a Texas buyer and an Oklahoma seller of a nationwide nursery business. The seller had violated the contract’s non-compete covenant by operating a competing business in Oklahoma. The court held for the buyer after finding that, despite some differences, the covenant was valid under the laws of both Texas and Oklahoma.
In Fin Associates LP v. Hudson Specialty Insurance Company,212 the court upheld a New York choice-of-law clause and an arbitration clause in an insurance policy insuring 19 buildings located in New Jersey and one in Pennsylvania. The court did not discuss the content, much less the policies, of the involved states’ laws or any of the other factors for determining the enforceability of choice-of-law clauses under New Jersey conflicts law. What was determinative in the court’s view was the fact that the insureds were sophisticated enough and had employed a commercial insurance broker to negotiate the policy on their behalf.
In Moore v. Fischer,213 a loan contract between a Delaware lender and a New Jersey borrower contained a Delaware choice-of-law clause and a clause charging an atrocious interest rate of 180%. That rate was permissible under Delaware law, but not under New Jersey law. The New Jersey trial court recognized that the application of Delaware law would violate New Jersey’s fundamental policy in protecting its consumers from usury. Nevertheless, the court upheld the contract, after finding that the borrower had visited the lender’s Delaware establishment and negotiated and signed the contract there, thus making Delaware law applicable anyway. The appellate court reversed and remanded, after finding that the trial court did not give enough weight to the borrower’s allegations that she had applied for the loan from her New Jersey home and received the approval there, and that her visit to Delaware was for the sole purpose of signing the contract and picking up the money.
2. Inbound Clauses
Change Capital Partners Fund I, LLC v. Volt Elec. Sys., LLC, 214 also involved a loan contract containing a Delaware choice-of-law clause and charging an exorbitant interest rate of 102%. The lender was incorporated in Delaware and headquartered in New York, the borrowers were based in Texas, and the contract was negotiated in New York and signed by the borrowers in Texas. When the borrowers defaulted, the lender’s assignee sued the borrowers in Delaware, which somehow had jurisdiction.215 The defendants argued that the Delaware choice-of-law clause was unenforceable because the application of Delaware law, which allowed such a high interest rate, would violate the fundamental public policy embodied in the anti-usury laws of both Texas and New York. The Delaware court acknowledged this conflict in fundamental policy but nevertheless held the clause enforceable because—despite Delaware’s lack of significant contacts—the defendants did not affirmatively demonstrate that the laws of either Texas or New York would be applicable in the absence of the choice-of-law clause.
In North American Tubular Services, LLC v. BOPCO, L.P.,216 the issue was the enforceability of a Texas choice-of-law clause and an indemnity clause in a contract between Texas parties for oilfield services in New Mexico. The indemnitor argued that the court should hold the indemnity clause unenforceable under New Mexico law. The Texas court rejected the argument after finding that, because of Texas’s numerous contacts, Texas law would have been applicable even in the absence of the Texas choice of law clause, and that the indemnity clause was valid under Texas law.
In Oxford Global Resources, LLC v. Hernandez,217 the issue was the enforceability of a Massachusetts choice-of-law clause and a non-solicitation covenant in an employment contract between a Massachusetts employer and a California domiciliary hired for work in California. The covenant was arguably enforceable under Massachusetts law, but was expressly prohibited by a California statute. When the employee quit his employment and allegedly breached the non-solicitation covenant while working for a competing California employer, the Massachusetts employer sued its former employee in Massachusetts under the contract’s forum selection clause. The Massachusetts Supreme Court held that the Massachusetts choice-of-law clause was unenforceable because: (1) in the absence of a choice-of-law clause, California law would govern the employment contract; (2) California had a materially greater interest in applying its law than Massachusetts; and (3) the application of Massachusetts law would violate a fundamental public policy of California in promoting open competition and protecting employee mobility. Finally, the court affirmed the lower court’s dismissal of the action on forum non conveniens grounds, after finding that the forum selection clause did not prevent such dismissal and that the employee had carried the burden of satisfying the forum non conveniens factors.
d. Choice-of-Law and Forum-Selection Clauses
As noted in the Surveys of previous years, most American courts decide the enforceability of forum selection clauses without conducting a choice-of law analysis.230 This trend continues even in cases in which the contract contains a choice-oflaw clause, in addition to the forum selection. For example, in the more than twenty appellate cases of 2018 in which the contract contained both outbound choice-of-law and forum-selection clauses,218 only two cases addressed the question of which law governs the enforceability of the forum selection clause. In the first case, Pure Hospitality Solutions, Inc. v. Canouse,219 the Georgia Court of Appeals explained its decision in a single sentence: “Because forum selection clauses involve procedural rights, we apply Georgia law even though the agreement also
contains a provision dictating that it be governed by the laws of [Connecticut].”220 One may agree or disagree with the court’s choice,221 but at least the court saw the need to explain it, albeit summarily. In the second case, Beltran v. AuPairCare, Inc.,222 the contract between several foreign au pairs and an au pair sponsoring company contained California choice-of- law, forum selection, and arbitration clauses and the case was litigated in Colorado.
However, the au pairs agreed, perhaps unwisely, that because of the California choice-oflaw clause, California law should govern the enforceability of the California forum selection and arbitration clauses. Without considering any other alternatives, the court obliged and held both clauses enforceable.223
In all other 2018 cases involving this pattern, the courts implicitly or explicitly applied the substantive law of the forum without explaining their choice.224 The same Among the latter cases, Liberty Woods International, Inc. v. M/V Ocean Quartz,227 presented several similarities with the Supreme Court’s decision in Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer.228 A bill of lading covering goods transported to New Jersey contained a mandatory forum selection requiring litigation in South Korea. When the goods arrived in damaged condition, the shipper filed an in rem action against the vessel in New Jersey federal court. The plaintiff argued that, because South Korea did not allow in rem actions against ships, the forum selection clause violated section 3(8) of the Carriage of Goods by Sea Act (COGSA), which voids “[a]ny clause . . . relieving the carrier or the ship from liability for loss or damage to . . . the goods, arising from negligence, fault, or failure in the duties and obligations provided in this section, or lessening such liability otherwise than as provided in this Act.”229 Relying on Sky Reefer, the court rejected the argument. The court pointed out that Sky Reefer interpreted COGSA as prohibiting the lessening of substantive liability but not the procedural means and costs of enforcing that liability:
COGSA protects ship liability, not any particular vehicle for imposing it. The text does not mention in rem suits, nor require any specific remedy for enforcing ship liability. Indeed, such an interpretation would run counter to Sky Reefer’ s holding that COGSA does not protect procedural means for enforcing liability.230
The court rejected the plaintiff’s argument that the right to file an in rem action was essentially a substantive right, reasoning, inter alia, that accepting the argument would lead to invalidating numerous foreign forum selection clauses in maritime contracts because, unlike the United States, many countries do not allow in rem actions against the ship.
Quanta Computer Inc. v. Japan Communications Inc.231 is a rather unique case in which a court designated in a mandatory forum selection clause (coupled with an inbound choice- of-law clause) chose not to exercise the jurisdiction that the clause conferred on it. The case is even more remarkable in that it was litigated in a state, California, which, following New York’s early example, enacted a statute designed to attract high value-cases to their courts.232 Section 4010.40 of the California Code of Civil Procedure provides that “any person” may sue “a foreign corporation or nonresident person” in California, if “the action . . . arises out of or relates to any contract . . . for which a choice of California law has been made . . . and which
(a) . . . involv[es] in the aggregate not less than one million dollars ($1,000,000), and (b) contains a provision . . . under which the foreign corporation or nonresident agrees to submit to the jurisdiction of the courts of [California].”233 The proponents of this provision argued that it would “attract to [California’s] legal community international transaction[s]— particularly international arbitration.”234 In Quanta Computer, the parties were a Taiwanese manufacturer and a Japanese buyer of cellular telephones. Despite the absence of any contacts with California, the parties agreed on a California forum because of its neutrality. When the Taiwanese company sued the Japanese company for breach of contract, the Japanese company moved for dismissal on forum non conveniens grounds. The trial court granted the motion, reasoning, inter alia, that given the absence of any contacts with California, there was no reason “to burden the already overburdened court system in Los Angeles with this litigation.”235
The Court of Appeals affirmed. First, the court found that the Japanese defendant’s forum non conveniens arguments were “without merit, because [the defendant] agreed to (and most likely proposed) California as a forum.”236 Second, the court found that the defendant failed to carry its burden of showing the mandatory forum selection clause was “unreasonable” and thus unenforceable. Nevertheless, the court concluded, the fact that California has jurisdiction under such a clause does not mean that a court is compelled to exercise it. In cases such as this one, which lack any connections with California and there is a suitable alternative forum elsewhere, a court has discretion not to exercise its jurisdiction:
California has no public interest in providing a forum for resolution of a dispute between two Asian companies, involving a contract formed and executed in Asian countries, where there are suitable alternatives. The determination not to burden our courts with this purely foreign litigation was well within the [trial] court’s considerable discretion.237
Finally, the court concluded that the aforementioned § 4010.40 did not prevent the dismissal of the action. The court noted that § 410.40 “recognizes the existence of jurisdiction in California for an aggrieved party to file a lawsuit against a foreign corporation for wrongs that have occurred abroad.”238 However, said the court, “[t]his is not to say that the aggrieved party is entitled to have its lawsuit heard in [California].”239 A California court may still dismiss the case for “legitimate and substantial interests,” such as the absence of California interests and the presence of foreign interests in providing in a forum.240
e. Choice-of-Law and Arbitration Clauses
DeGraff v. Perkins Coie California P.C.,241 was one of several cases in which the contract contained choice-of-law and arbitration clauses.242 A partnership agreement between a Seattle law firm and a California partner contained a Washington choiceof-law clause and a clause mandating arbitration in Washington. The California court, applying Washington law, held that some of the provisions of the arbitration agreement were substantively unconscionable but were severable from the rest of the agreement.243
In Vera v. US Bankcard Services, Inc.,244 a credit card contract between a California- based bank and a small California business contained a Georgia choice-of-law clause and a clause mandating arbitration in Georgia. The California court, applying California law, held that the arbitration clause was procedurally and substantively unconscionable because, inter alia, the application of Georgia law would deprive the credit card holder of certain important statutory remedies under California law.
In Galilea, LLC v. AGCS Marine Insurance Company,245 a maritime insurance policy provided that it was to be governed by United State federal maritime law and, in case that law had any gaps, by New York law. The policy also contained a clause mandating arbitration in New York. The policy insured a yacht owned by a Nevada company whose sole members were two Montana residents. The yacht ran ashore in Panama and the insurer refused to provide coverage because the risk occurred outside the geographic zone covered by the policy. The insurer initiated arbitration proceedings in New York while the insureds initiated proceedings in federal court in landlocked Montana. The insureds argued that the arbitration clause was unenforceable because it violated Montana’s public policy, and that the Federal Arbitration Act (FAA) did not preempt Montana law because the federal McCarran–Ferguson Act precluded the application of the FAA.
The Ninth Circuit rejected the argument as “sail[ing] too far ahead too fast.”246 The court noted that, under Supreme Court precedents, when an “insurance policy . . . is a maritime contract the Admiralty Clause of the Constitution brings it within federal jurisdiction”247 and subjects it to “applicable maritime law if such law exists.”248 The court held that, in this case the applicable maritime law was the FAA and it mandated the enforcement of the arbitration clause regardless of what Montana law provided. The court held in the alternative that the same result would follow under a horizontal choice-of-law analysis: the parties had agreed to the application of federal maritime law, and Montana, in light of its rather tenuous contacts, did not have a materially greater interest in applying its law.249
Mandviwala v. Five Star Quality Care, Inc.250 involved a dispute arising from a California employment contract that contained a Maryland choice-of-law clause and a mandatory arbitration clause. The California employee brought a putative class action in California against her employer alleging violations of California labor laws regarding unpaid wages and seeking representative civil penalties under California’s Private Attorney General Act (PAGA). The Ninth Circuit held that PAGA represented a fundamental California policy and because application of Maryland law would result in a waiver of the plaintiff’s representative PAGA claims, the Maryland choice-of-law clause was unenforceable. The court then distinguished between the plaintiff’s claims for unpaid wages, which are private claims that are collected in an individual capacity, and her claims for penalties under PAGA, which are sought in a representative capacity and are paid mostly into the state treasury rather than to the aggrieved employee. The court held that the arbitration clause was enforceable with regard to the wages claims but not with regard to the PAGA claims. The court also concluded that its ruling regarding the non-arbitrability of PAGA claims was not preempted by the FAA and the Supreme Court’s decision in DirecTV, Inc. v. Imburgia.251 The Supreme Court denied certiorari.252
2. Contracts without Choice-of-Law Clauses
In Portfolio Recovery Associates, LLC v. Sanders,253 the initial contract between a Virginia credit card company and a Utah credit-card holder, who later defaulted, contained a Virginia choice-of-law clause. However, the clause was inapplicable to the dispute between the credit card holder and a collection agency, to whom the credit card company assigned its claim. The court found that, when the company sent a final demand letter to the credit card holder (who at that time was domiciled in Washington) and he did not object, a new “contract for an account stated” came into existence and that contract did not contain a choice-of-law clause. The collection agency’s action would have been untimely under Virginia’s three-year statute of limitation (if applicable) but was timely under the six-year statute of the forum state, Oregon, where the credit card holder had moved his domicile in the meantime. Oregon is one of the states that have adopted the Uniform Act on statutes of limitations, which, subject to some exceptions, requires the applications of the statute of limitations of the state whose law governs the merits of the claim. Thus, the court had to determine the law applicable to the merits, without the aid of a choice-of-law clause.
Applying the Oregon codification for contract conflicts, the court noted that:
- the relevant contacts were dispersed among several states (Utah, Washington, Virginia, and Oregon); (2) “as between Virginia and Oregon, the relevance of the connections does not resolve the conflict-of-law issue, as none of those connections is of the type that evidences a state interest in having its law applied;”254 (3) “the parties have not identified, and we do not readily perceive, any state policies underlying the length of time provided in the respective statutes of limitation of Virginia or Oregon that is relevant to the matters that the statute directs us to consider;”267 and (4) “Virginia would have no substantial interest in having its statute prevent [plaintiff’s] action because defendant was not a resident of ”255 Then, following the path of least resistance, the court concluded: “Where neither state has a connection to the transaction such that it has an interest in having its law applied, we will apply the law of Oregon as the forum state.”256 The court based this conclusion on Erwin v. Thomas,257 a 1973 tort case. Apparently, the parties and the court were unaware that the Oregon codifications for contract and tort conflicts have both repudiated Erwin’s methodology and the tort codification overruled its result.
In Larsen v. Giannakoulias,258 the contract, a prenuptial agreement which the parties downloaded from an Internet site, did not contain a choice-of-law clause. The parties were domiciled in New Mexico when they signed the agreement but moved to Tennessee long before their divorce trial. The agreement, which waived alimony, was enforceable under the law of Tennessee but not of New Mexico. Tennessee is still a lex loci contractus state, despite having abandoned the lex loci delicti rule in 1992. However, its lex loci contractus rule is subject to an exception upon a showing that the parties in good faith intended for another law to apply. Relying on this exception, and because the parties frequently moved their domicile from one state to another, the trial court came up with a creative solution—that the parties intended their contract to be “ambulatory in nature,” and was to be governed by “the law of the state where they’re living at the time they need it.”259 That time, the trial court reasoned, would be the end of the marriage, not the beginning. The Tennessee Court of Appeals rejected the argument, noting that a prenuptial agreement goes into effect at the time the parties enter into the marriage and not later. Consequently, under the lex locus contractus rule, New Mexico law governed the agreement.
C. Torts
1. Common Domicile Cases
Two Illinois cases involved the common-domicile pattern in which parties domiciled in one state, in this case Illinois, are involved as tortfeasor and victim in a tort that occurs entirely in another state. Both cases fit the Babcock pattern in which the law of the common domicile provided recovery, but the state of the tort did not. In the first case, Hand v. Hand,260 the court applied the law of the common domicile, Illinois. In the second case, Perkinson v. Courson,261 the court applied the law of the state of the tort. The difference in result can be explained by the fact that Hand involved a loss-distribution conflict, whereas Perkinson involved a conduct-regulation conflict. However, as is often the case, neither court used these exact terms.
Hand was a typical interspousal immunity conflict. The parties, husband and wife domiciled in Illinois, were involved in a single-car accident in Indiana when the husband lost control of the car. Indiana’s guest statute provided that, in the absence of wanton or willful misconduct, the driver was not liable for injuries to a passenger spouse.262 Illinois did not provide such immunity. Applying the Restatement (Second), the Illinois court held that Illinois law governed. The court noted that, in typical personal injury cases, the court begins with the presumptive rule § 146, which provides for the application of the law of the state of injury. “However,” said the court, “the question of interspousal immunity is not a question of a tort itself. Rather, it is a question of a particular issue in tort”;263 and for that issue the applicable Restatement section is § 149, which provides that the applicable law is “usually” the law of the common domicile, unless another state has a more significant relationship under §§ 145 and 6. After examining the contacts of § 145 and the principles of § 6, the court had no difficulty concluding that the law of the common domicile should govern. The court reasoned that, “because the only question before us pertains to interspousal immunity and not whether a tort was committed, the contacts of paramount importance are the parties’ domicile and where their relationship was centered.”264 The court concluded:
[T]he parties’ domicile is the most important contact such that the interspousal immunity question must be answered in favor of Illinois law . . . [because] Illinois’s interest in regulating the ability of its married domiciliaries to bring tort actions against each other outweighs any interests Indiana has in preventing those actions by guests who are merely passing through the state on their way back home to Illinois.265
The Perkinson case arose out of an equestrian accident and involved a conductregulation conflict, although the court did not use this term. The defendant’s horse, named “Little Bit,” kicked the plaintiff more than a little while the two equestrians, domiciled in Missouri, were riding their horses side-by-side in a Missouri recreational facility. An Illinois statute imposed strict liability on the owners of dogs and “other animals,”266 whereas a Missouri statute imposed such liability only on dog owners.267 Moreover, another Missouri statute, the Equine Liability Act, which codified the common law principle of assumption of risk, released the horse owners from liability for injuries occurring during recreational equine activity.268 Additionally, the plaintiff signed a release containing an assumption of risk statement and releasing from liability the Missouri organizer of the Missouri horseback rides as well as “participants” in the rides, such as plaintiff.269 Under these circumstances, the conflict was as easy as they come. The court could have held that the Missouri assumption of the risk statute was conduct regulating and as such applied to all recreational equine activity within Missouri regardless of the parties’ domicile. Conversely, the Illinois statute was also conduct regulating and as such it only applied within Illinois territory and did not follow Illinois equestrians in Missouri.
However, the Illinois court had to follow the Restatement (Second) which, unlike the forthcoming Third Restatement,270 does not conspicuously spell out the conduct-regulation vs. loss-distribution distinction and does not provide clear cut rules. In the end, the court reached the result suggested here, albeit in a roundabout way. The court began with the presumption of § 146, which provides for the application of the law of the state of injury, in this case Missouri, and then examined whether the presumption was rebutted under the contacts of § 145 and the principles of § 6. The court noted that the occurrence of the injury in Missouri was not fortuitous because the Missouri recreational facility was the planned destination of both parties. The court found that most of the relevant conduct also occurred in Missouri, dismissing the plaintiff’s argument that it also occurred in Illinois where the defendant failed to properly train her horse. After noting that the parties’ domiciles and the place of their relationship (or rather acquaintance) were in Illinois and thus the § 145 contacts were evenly split between Illinois and Missouri, the court turned to the policies of § After extensive discussion of those principles, the court concluded that they did not rebut the § 145 presumption in favor of the law of the state of injury.
Smith v. Church Mutual Insurance Company271 arose out of a two-car traffic accident in Mississippi involving Tennessee parties traveling independently. A van owned by a Tennessee church and carrying twelve children collided with a car driven by a Tennessee driver, just south of the Tennessee-Mississippi border. The children and the van driver, who was pregnant and had a miscarriage as a result of the accident, sued in Mississippi. The Mississippi trial court held that “any issues involving Mississippi’s Rules of the Road would be controlled by Mississippi law”272 and that Tennessee law would govern all other issues.
The Mississippi Supreme Court affirmed the holding with regard to the rules of the road but held that on two other issues the application of Tennessee law would be “repugnant to the laws of [Mississippi].”273 The first issue was whether the van driver was entitled to a wrongful death action for the loss of her unborn child or fetus. The answer was uncertain under Tennessee law because it would depend on whether the fetus was “viable” at the time of the accident. By contrast, Mississippi law provided an action for the wrongful death an “unborn quick child,” which it defined as “a child that has developed so that it moves within the mother’s womb.”274 The court described at length and with passion the importance of this rule to Mississippi and explained why, in its view, it should be applied even to non- Mississippians. The court said that “Mississippi ha[d] declared a governmental interest in the dignity and intrinsic worth of the unborn and ha[d] bestowed the status of a person when the unborn shows some evidence of life within the womb.”275 The court continued:
When a person steps foot in this State, he not only is bound to abide by, but is also burdened with Mississippi law, which the trial court recognized in applying Mississippi’s Rules of the Road. Likewise, persons are entitled to the benefits that come with those burdens[.] . . . Wrongfuldeath beneficiaries of an unborn, quick child are afforded a right to a remedy for their injury. Such a deprivation of that right [under Tennessee law] is wholly repugnant to the laws of this State.276
The second issue for which the Mississippi court felt very strongly was the issue of comparative negligence. As the court explained, Mississippi was the first state to introduce comparative negligence in 1910.277 Mississippi followed the pure version of comparative negligence, which allowed the plaintiff to recover damages, reduced by the percentage of her fault, without regard to whether that percentage was lower or higher than the defendant’s fault. By contrast, said the court, “Tennessee law on this subject is a century behind Mississippi.”278 Tennessee followed the forty-ninepercent rule, which allows recovery only if the plaintiff’s negligence is less than that of the defendant. The court noted that, although in this phase of the litigation the percentage of each party’s fault was unknown, in some cases the application of the Tennessee rule “could result in no recovery to a severely injured person”279 and could even deny recovery to both of them if they were equally at fault.280
In a thoughtful dissent joined by two members of this nine-member court, Justice Ishee pointed out that the majority misapplied the public policy (ordre public) exception. He quoted from an earlier Mississippi case a statement that a conflict between the law of Mississippi and another state “does not itself mean that the foreign law is so offensive that it must be set aside.”281 Noting that “repugnance requires more than mere inconsistencies,”282 the dissent quoted Judge Cardozo’s classic statement that the public policy exception is properly applied only when the foreign law violates “‘some fundamental principle of justice, some prevalent conception of morals, some deep-seated tradition of the common weal.’”283
2. Cross-Border Unfair Trade Practices
In Danganan v. Guardian Protection Services,284 the Pennsylvania Supreme Court held that Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) applied against a Pennsylvania headquartered company in a case arising from a transaction that occurred in another state and involved a party domiciled in the latter state. The company provided home security services to a District of Columbia resident and then continued to charge him for those services after he informed the company that he had sold that house and moved to California. The plaintiff filed a putative class action in Pennsylvania federal court under the UTPCPL on behalf of himself and more than 17,000 similarly situated consumers from several states.
The UTPCPL provided an action to “any person” against any other “person” for “unfair or deceptive acts . . . in the conduct of any trade or commerce”285 and did not contain any geographic limitation of these terms. The defendant argued that, in cases in which the plaintiff is not a Pennsylvania domiciliary, the UTPCPL applies only if “there exists a sufficient nexus between the transaction or injury and [Pennsylvania], such that the improper conduct primarily and substantially occurred in Pennsylvania.”286 Otherwise, the defendant argued, “anyone from anywhere in the world could assert a claim under the UTPCPL.”287
The Third Circuit certified to the Pennsylvania Supreme Court the question of “[w]hether a non-Pennsylvania resident may bring suit under the [UTPCPL], against a business headquartered in and operating from Pennsylvania, based on transactions which occurred outside of Pennsylvania?”288 The Pennsylvania court answered the question in the affirmative. The court based its conclusion primarily on a textual interpretation of the UTPCL, but also offered some policy reasons. The court reasoned that interpreting the statute as “protective of non-residents in the absence of contrary statutory language” was consistent with the statute’s “remedial” character and its purposes of “equalizing the bargaining power of the seller and consumer, ensuring the fairness of market transactions, and preventing deception and exploitation.”289 The court also noted that the nexus requirement, at least as the defendant described it by requiring that the injury or transaction must occur within Pennsylvania, was tantamount to “restat[ing] the now-rejected lex loci delecti [sic] rule.”290
Kubbernus & Balaton Group, Inc. v. ECAL Partners, Ltd.291 was a similar case involving the application of the Texas Securities Act (TSA) to securities sales emanating from Texas. The defendants argued that, because the purchasers (the plaintiffs) were domiciled in other states and foreign countries and had sustained their losses there, they could not assert claims under the TSA “because such . . . claim[s] would involve an improper extraterritorial application of Texas law.”292 To be sure, as the Surveys of previous years have underscored, there is nothing “extraterritorial” in the application of a state’s law to conduct that occurs in that state, but the injuries occur elsewhere. The Texas Court of Appeals properly rejected the defendants’ argument. The court relied on Citizens Insurance Co. of America v. Daccach,293 in which the Texas Supreme Court held that the application of the TSA to non-Texas purchasers and purchases was necessary for achieving the TSA’s purposes. 294 The Court of Appeals concluded that “the Texas legislature intended the TSA to apply to transactions emanating from Texas, even when they involve non-Texas residents.”308
Thornell v. Seattle Service Bureau, Inc.309 involved the interpretation and applicability of the Washington Consumer Protection Act (WCPA) to out-of-state consumers who suffered their injuries in their home states. In a decision discussed in the 2015 Survey, the Washington Supreme Court answered a question certified by the Ninth Circuit by holding that the WCPA did not exclude from its scope actions filed by out-of-state plaintiffs against a Washington defendant for sending allegedly deceptive debt collection letters from Washington in violation of WCPA.310
When the case returned to the federal courts, the district court held that the Washington court’s holding that the WCPA was applicable to out-of-state plaintiffs did not mean that it should be applied in this case. Instead, the court held that this case was governed by the law of the plaintiff’s home state of Texas, which did not provide an action for actions such as the plaintiff who did not qualify as a consumer. The Ninth Circuit affirmed. The court based its decision on § 148 of the Restatement (Second), which applies to misrepresentation. The court concluded that that Texas’s contacts were the “most significant” because the plaintiff “reside[d] there, received the letters there, and suffered any damages there,” and that a policy analysis did “not overcome the clear preponderance” of Texas’s contacts.311 The court noted that Washington had an interest in applying its law “to deter deceptive conduct by an instate defendant,” but thought that that Texas, “where the plaintiff live[d] and all alleged damages occurred, also ha[d] an interest in having its law applied to its resident claimants.”312 The court deemed immaterial the fact that Texas law did not protect the Texas plaintiff.313
In a strong dissent, Judge Marsha Berzon noted, inter alia, that Texas’s prodefendant law was intended to protect Texas defendants and, “[w]ithout any Texas defendants to protect,” applying Texas law “serve[d] no purpose other than uniquely to disfavor Texas plaintiffs who are otherwise entitled to sue in Washington.”314 On the other hand, since the defendant was based in Washington and acted there, Washington had an interest in applying its law to protect the Washington public and promote honest competition there.295
In Premium Freight Management, LLC v. PM Engineered Solutions, Inc.,296 the conflict was between the Connecticut Unfair Trade Practices Act (CUTPA), which protected the Connecticut plaintiff (the seller) who suffered losses in Connecticut, and Michigan’s corresponding Act, which protected the Michigan defendant (the buyer) who acted in Michigan. The case was decided in a neutral forum, Ohio. The court held that Connecticut law should govern, basing its decision on both contacts and state interests. Regarding contacts, the court reasoned that, although the rest of the contacts were divided between the two states, what tipped the scales was that the parties’ relationship was based in Connecticut and the goods, which were manufactured in Connecticut, were delivered in that state. Regarding interests, the court acknowledged that Michigan “unquestionably ha[d] an interest in protecting its businesses from excessive liability for unfair trade practices,” but concluded that “the state with the ‘strongest interest’ in regulating unfair trade practices, whether liability is imposed or foreclosed, is the state where the harm occurred.”297 In this case, therefore, “[b]ecause the harm occurred in Connecticut, it is Connecticut that has the strongest interest.”298
3. Other Torts
In Jahnke v. Deere & Company,299 the Iowa Supreme Court held that the Iowa Civil Rights Act (ICRA) did not apply to an alleged discriminatory demotion and repatriation of an Iowa domiciliary for misconduct committed during his employment for the defendant in China. The court found that the text of ICRA did not contain any expression indicating an intent to be applied extraterritorially and that in this case all the disciplinary decisions regarding the employee were made in China and approved at the employer’s headquarters in Illinois. Under these circumstances, the fact that the employee lived and worked for the employer in Iowa before and after the demotion or that one of the Illinois managers who approved the demotion was also domiciled in Iowa, were not sufficient contacts to justify the application of ICRA.
Viener v. Casano300 involved an action for alienation of affections, which was filed in Mississippi, one of a handful of states that recognize this action. A Louisiana husband sued a Mississippi defendant, alleging that the defendant caused the breakdown of the plaintiff’s marriage. The defendant had met the plaintiff’s wife during a trip to Florida and developed a relationship with her that included encounters in several states including Louisiana, but only one in Mississippi. Louisiana, unlike Mississippi, does not allow an action for
alienation of affections. Applying Mississippi’s center of gravity approach along with the Restatement (Second), the Fifth Circuit held that, as the state of the matrimonial domicile and the place of injury, Louisiana presumptively had the most significant relationship and that the policy considerations of § 6 of the Restatement (Second) did not rebut that presumption. In the court’s words, “Mississippi case law indicates only that Mississippi has a strong public policy in favor of protecting the marriages of its own citizens” but “it is essentially silent as to whether Mississippi has a strong public policy interest in protecting the marriages of citizens from other states.”301 The court held that Louisiana law governed, barring the action.
Coulter v. ADT Security Services302 was a dispute between a company that provided residential alarm monitoring services and a Pennsylvania homeowner, the plaintiff. The company installed an alarm system in the plaintiff’s Pennsylvania house in 2007 and represented to her that the company will monitor the alarm on a daily basis. In 2013, the plaintiff moved to New Jersey but kept her Pennsylvania house and alarm system. Later that year, the plaintiff discovered that the company had been monitoring the alarm only once a month. Thereafter, the plaintiff discovered that the alarm stopped functioning, but the company never notified her. The plaintiff sued the company in Florida on both contract and tort counts. The Eleventh Circuit held that Pennsylvania law governed her claims under the 2007 contract, but a time limitation contained in the contract, which was enforceable under Pennsylvania law, barred those claims. The court also held that Pennsylvania law governed the plaintiff’s tort claims arising from the 2007 misrepresentation, and that Pennsylvania’s statute of limitation barred those claims as well. Finally, the court held that New Jersey law governed the plaintiff’s tort claims arising from the 2013 events, but that law did not allow recovery for pure economic loss.
F. Products Liability
The most important products liability decision of the year, or at least the biggest, was In re Accutane Litigation.303 In this case, the New Jersey Supreme Court held that New Jersey’ pro- manufacturer law governed the products liability actions of 532 plaintiffs from 45 states against the New Jersey manufacturer of an anti-acne drug. The drug caused harmful side effects and the plaintiffs alleged that the manufacturer had failed to provide adequate label warnings informing users of this risk. Under New Jersey law, warnings that, as in this case, received the approval of the federal Food and Drug Administration (FDA) were presumptively adequate as a matter of law. The court found that the plaintiffs did not rebut this presumption. In so holding, the New Jersey Supreme Court reversed the decision of the intermediate court, which had applied the law of the states in which the plaintiffs had suffered their injuries. That holding produced temporary victories for most but not all plaintiffs.304 The Supreme Court decision produced a victory for the manufacturer in all cases.
The court began with the presumption of § 146 of the Restatement (Second), which calls for the application of the law of the state of injury, unless another state has a more significant relationship under the contacts of § 145 and the factors of § 6. After finding that a weighing of the § 145 contacts produced “mixed results,”305 the court turned to the factors of § 6 and found two of them to be decisive: factor (f) (“certainty, predictability and uniformity of result”); and factor (g) (“ease in the determination and application of the law to be applied”).306 The court reasoned that applying a single law, in this case New Jersey’s, to the actions of all plaintiffs would “ensure predictable and uniform results—rather than disparate outcomes among similarly situated plaintiffs, who took the same medications and were presumably advised by their physicians of the same risks and benefits based on the label warnings” and would “[r]emove[] from the equation . . . the fortuity of the place where individual plaintiffs reside and where the injury occurred.”307 It would also ease the court’s burden, especially at the trial court level, where “[a] single judge . . . cannot be expected to gain a mastery of the laws of forty-five jurisdictions,”308 and would reduce errors, delays, and appeals. The court concluded that, based primarily on these factors, New Jersey had the most significant relationship, “thus overcoming section 146’s presumption that the law of the place of injury governs.”309
The court explained that it was “not picking sides or winners, but merely establishing a reasonable rule of law that can be implemented by [lower] courts and that can best advance the administration of justice.”310 The court correctly noted that, although in this case New Jersey law favored the defendant, in other cases it favored or will favor the plaintiffs. The court pointed to McCarrell v. Hoffmann-La Roche, Inc.,311 which applied New Jersey’s pro- plaintiff statute of limitation, and Rowe v. Hoffman-La Roche, Inc.,312 in which New Jersey law favored the plaintiff, but the court did not apply it. In any event, said the court, “each plaintiff controls his or her fate” and “[p]laintiffs can choose to bring suit in the state where they reside and the injury occurred and probably enjoy the benefit—if it is a benefit—of their own state law.”313
In Stange v. Janssen Pharmaceuticals, Inc., 314 another product liability case filed against a manufacturer of pharmaceuticals, the plaintiff, a Wisconsin domiciliary, chose to sue the manufacturer in Pennsylvania, along with more than 5,000 other claimants from around the country. The trial court limited its choice of law analysis between the laws of New Jersey and Pennsylvania, which were the principal places of business of the defendants and their subsidiaries. The court held that New Jersey law governed, barring the plaintiffs’ claim for punitive damages. On appeal, the intermediate court reversed, holding that the trial court should have also considered the interests of Wisconsin in allowing punitive damages. The court noted that, although New Jersey had an interest in “shielding its pharmaceutical industry from imposition of punitive damages,” Wisconsin also had “an important interest in protecting its citizens, such as [plaintiff] against tortious conduct. The court remanded the case to the trial court with instructions to resolve this true conflict under Pennsylvania’s mixed choice-of-law approach.
Murray v. Janssen Pharmaceuticals, Inc.315 involved the same defendants and the same drug as Stange, but the plaintiff was a Maryland domiciliary. The Pennsylvania court disposed of the punitive damages issue in the same way as in Stange by remanding the case with instructions to resolve the true conflict between New Jersey law and the law of the state of injury, Maryland. However, Murray presented an additional conflict. Maryland law capped noneconomic damages to $500,000, whereas Pennsylvania law did not. As the court put it, “Maryland’s law favors protecting defendants in the interest of limiting their liability and making insurance more available and affordable in the state,” while “Pennsylvania’s law appears more plaintifffriendly, as it sets no cap on noneconomic damages and aims to fairly and adequately compensate plaintiffs, as determined by juries and trial courts.”316 The court concluded that, because the defendant was “not incorporated nor d[id] it have a principal place of business in Maryland, which has a defendant-protecting rule,” and the plaintiff did “not reside in Pennsylvania, which has a plaintiff-friendly rule,” this was an “unprovided-for” case.317 The court resolved the conflict under the Restatement (Second), concluding that the plaintiff did not rebut the presumption of § 146 in favor of the law of the state of injury, which was also the place where the plaintiff used the drug and suffered the injury.
Miller v. Ford Motor Company318 was a statute-of-repose conflict. A Ford car manufactured in Missouri and sold in 2001 caught fire in May 2012 while parked in the owner’s driveway in Oregon. When the owner sued Ford in Oregon in April 2014, Ford invoked Oregon’s unique statute of repose. Subsection (1) of that statute subjects products liability actions to a two year-limitation period, starting at discovery,319 and subsection (2) provides that, in any event, the action “must be commenced before the later of: “(a) Ten years after the date on which the product was first purchased . . . ; or (b) The expiration of any statute of repose for an equivalent civil action in the state in which the product was manufactured[.]”320 Because Missouri did not have a statute of repose, Ford argued that the court should apply Oregon’s 10-year statute, which barred the action. By contrast, the plaintiff argued that, because Missouri did not have a statute of repose, Oregon’s statute of repose was inapplicable. Thus, her action was timely because it was filed within the two-year limitation period of subsection (1). The Ninth Circuit certified to the Oregon Supreme Court the question of the proper meaning of subsection 2. In a comprehensive opinion thoroughly exploring the legislative history of the statute and analyzing the text, the court agreed with the plaintiff’s interpretation. The court held that, “when an Oregon product liability action involves a product that was manufactured in a state that has no statute of repose for an equivalent civil action, then the action in Oregon also is not subject to a statute of repose” in Oregon.321
G. Statutes of Limitation322
MTK Food Services, Inc. v. Sirius America Ins. Co.323 was decided in New Jersey, one of the 24 states that have abandoned the procedural characterization of statutes of limitation, and one of the eight states that have adopted § 142 of the Restatement (Second) as revised in 1988.324 A Pennsylvania restaurant owner sued an attorney who practiced law in both Pennsylvania and New Jersey for legal malpractice in not acting timely to prevent the expiration of the Pennsylvania statute of limitation in the plaintiff’s claim against the restaurant’s insurer. However, the plaintiff’s own malpractice action against the attorney was untimely under Pennsylvania’s two-year statute of limitation, although it was timely under New Jersey’s six-year statute. Applying § 142, the trial court held the action timely under New Jersey law. Section 142 provides that, in cases of this pattern, the forum’s longer statute presumptively applies unless “maintenance of the claim would serve no substantial interest of the forum.”325 In this case, the trial court reasoned that New Jersey had a substantial interest in regulating attorneys who are licensed to practice law in New Jersey.
The Appellate Division reversed. The court pointed out that Pennsylvania had most of the relevant contacts and was the state in which the attorney acted or failed to act. The court concluded that “[t]he only pertinent connection to New Jersey—that [defendant], a New Jersey licensed attorney, worked in a New Jersey office—falls short of establishing a substantial interest for New Jersey to apply its statute of limitations.”326 The court also noted that the New Jersey State Bar Association had filed an amicus brief, arguing that the application of New Jersey’s longer statute of limitations would “defy public policy” and would “subject New Jersey attorneys also practicing in other states to disparate, unfair treatment” as compared to attorneys who only practice law in other states.327
Sallah v. Chhatrala Barstow, LLC328 was decided in California, a state that has also abandoned the procedural characterization of statutes of limitation and one of the seven states that apply to limitation conflicts the same choice-of-law analysis it applies to other issues.329 This was an unjust enrichment action filed against a California defendant by a court appointed monitor of a Florida-based investment entity. The action was timely under Florida’s statute of limitation but untimely under California’s shorter statute. Applying interest analysis, the California court found that “California’s interest outweigh[ed] Florida’s interest” and held that the California statute barred the action.330 The court noted that, in limitation conflicts, “the governmental interest approach generally leads California courts to apply California law . . . especially so where California’s statute would bar a claim.”331 The court reasoned that “California’s interest in applying its own law is strongest when its statute of limitations is shorter than that of the foreign state, because a state has a substantial interest in preventing the prosecution in its courts of claims which it deems to be stale.”332 In addition, said the court, California had an interest in “assur[ing] individuals and commercial entities operating within its territory that applicable limitations on liability set forth in the jurisdiction’s law will be available to those individuals and businesses in the event they are faced with litigation in the future.”333
Brandon v. Ivie334 was decided in Texas, one of the 28 states that continue to follow the procedural characterization of statutes of limitation.335 This was a personal injury action arising out of a traffic accident in Louisiana and involving two Texas drivers. The action was timely under Texas’s statute of limitation but untimely under Louisiana’s shorter statute. The defendant urged the court to “abandon the mechanical rules of the traditional theory in favor of more flexible choice-of-law methodologies” because “[t]he automatic application of the procedural law of the forum . . . does not allow a consideration of the particular facts and circumstances of each case, and often undermines the interests and policies of the interested states.”336 The court declined the invitation, noting that the defendant did “not explain how, in this case, the application of the law of the forum undermines the interests and policies of the interested states,” nor did he identify “an interest or policy undermined by the application by a Texas court of the Texas statute of limitations in a lawsuit between two Texas residents involving a Louisiana collision” or one that “would support the substitution of the procedural law of the forum by the more flexible choice-of-law approach he advocates.”337 In any event, said the court, “[a]s an intermediate appellate court,” it was “compelled to apply the established Texas law as declared by [the] supreme court,” which “considers statutes of limitations procedural” and to apply the Texas statute, barring the action.358
Paynter v. ProAssurance Wisconsin Ins. Co.338 was a medical malpractice action filed in Wisconsin state court by a Michigan patient against a doctor who practiced in both Michigan and Wisconsin. The plaintiff alleged that the doctor failed to correctly diagnose a cancerous tumor at an examination that took place at the doctor’s Michigan office. Four years later, the patient had surgery that showed that the cancer existed at the time of that examination and became much worse in the meantime. The action was timely under Wisconsin’s statute of limitation but untimely under Michigan’s shorter statute. Wisconsin’s borrowing statute provided that an action on a “foreign” cause of action must be dismissed “if the foreign period of limitation . . . has expired.”339 Under Wisconsin precedents, a tort cause of action is considered “foreign” if it arises from injuries that occurred outside Wisconsin.
The plaintiff argued that his injury was not entirely foreign and thus the borrowing statute was inapplicable. He based his argument first on a factual dispute, pointing out that the doctor had the samples examined in Wisconsin and may have been at his Wisconsin office when he called the plaintiff to tell him that he did not have cancer. Second, the plaintiff invoked a federal case from the Seventh Circuit, which held that a multistate defamation action was not “foreign” because a few copies of the defamatory material were sold in Wisconsin. The plaintiff argued that, because he lived near the Michigan-Wisconsin border, he “frequently” visited Wisconsin during the four-year period between the misdiagnosis and the surgery when the tumor was growing and hence he suffered some injury in Wisconsin. The court rejected the first argument and responded to the second argument by noting that the federal case, besides not being binding technically, was also distinguishable because multistate defamation “involves multiple, discrete injuries in different states,” whereas this case involved a single but “continuous injury.”340
However, the court still had to determine not only where this injury occurred but also when. The court held that, in cases of misdiagnosis, the injury occurs not at the time of misdiagnosis because “a misdiagnosis in and of itself, is not, and cannot, be an actionable injury,” but rather occurs “when the misdiagnosis causes a greater harm than existed at the time of the misdiagnosis.”341 Without elaborating on the meaning of the latter phrase, the court found that the injury occurred in Michigan where the plaintiff was domiciled throughout the relevant time. Thus, his cause of action was “foreign” and was barred by Michigan’s statute of limitations, which was applicable because of Wisconsin’s borrowing statute.342
In Bradley v. PNK (Lake Charles), L.L.C.,343 the Nevada Supreme Court rejected a challenge to the constitutionality of an exception to Nevada’s borrowing statute. The statute barred actions that are untimely under the shorter statute of limitation of the foreign or sister state in which the action arose but had an exception that preserved the actions of Nevada citizens. The plaintiff, who was domiciled in Texas and was injured in Louisiana, argued that this exception unconstitutionally discriminated against non-Nevada plaintiffs in violation of the Privileges and Immunities Clause. The court rejected the challenge, noting that the United States Supreme Court has upheld a comparable borrowing statute that differentiated between resident and nonresident plaintiffs because that statute nevertheless provided nonresident plaintiffs sufficient time within which to file their actions.344 The court noted that the same was true in this case because the plaintiff could have filed her Nevada action within the one-year period provided by the Louisiana statute of limitation but failed to do so.
If the above cases sound too technical and boring, here is one that is not: G and G Productions LLC v. Rusic345 begins with this question: “What happens when you cross an Academy Award-winning Italian film producer, a Croatian actress-turnedproducer, a bitter divorce, an oil painting worth millions of dollars, and dozens of pages of untranslated Italian law in the court of appeals?”346 In 1998, the producer, Vittorio Gori,347 bought a painting (Wine of Babylon) by the American neo-expressionist Jean-Michel Basquiat for $330,000.348 Gori hung this painting in his Italian house, which he shared with his then wife, Rita Rusic, the defendant in this case. In 1999, the parties divorced and, around that time, the painting disappeared. Gori suspected Rusic and, after sending her several demand letters, he filed a criminal complaint in Italy, which the court dismissed on statute of limitation grounds. He then assigned his claim to his lawyer, who assigned it Gori’s production company (G&G), who in 2015 sued Rusic in federal court in California for conversion, replevin, and unjust enrichment.
The district court dismissed the conversion action on statute of limitation grounds. However, the court based its decision not on the Italian judgment but rather on the Italian ten-year statute of limitation, which was applicable through California’s borrowing statute. In applying the borrowing statute, the court held that California law, rather than Italian law, determined when the plaintiff’s claim “accrued,” i.e., it came into existence, and that occurred in the year 2000. The plaintiff appealed the district court’s decision on this ground (and several others). In a decision discussed earlier,349 the Ninth Circuit affirmed. The court noted that the California Supreme Court has not ruled on whether California or foreign law governs the question of when a foreign cause of action accrues for purposes of the borrowing statute. Nevertheless, the Ninth Circuit held that: (1) the district court correctly decided that question under California law; (2) the court was “permitted” but not required to decide it under Italian law; and (3) in any event, in this case, the result would be the same under either law.350
H. Insurance Conflicts
Continental Insurance Company v. Honeywell International, Inc.351 is undoubtedly the most important decision of the year concerning insurance conflicts. With this decision, the New Jersey Supreme Court, which is generally considered the leader in this field, continued to refine, and in many respects redefine, its approach to mega insurance conflicts. In a series of cases involving insurance for environmental pollution, which were discussed in the surveys of previous years,352 the court refined the “site-specific” approach, using § 193 of the Restatement (Second)353 as the starting point but supplementing and modifying it by considering the factors and policies of § 6. In this case, the court did not rely on § 193, not even as a starting point. Instead, the court decided the conflict on the basis of § 188, the general section for contract conflicts, in combination with § 6. The reason for this shift was the nature of the insurance contracts involved in this case. Unlike insurance contracts for environmental pollution which cover specific sites, the contracts in this case provided nationwide coverage for a manufacturer’s liability for products manufactured in several states and sold and used in all states. The products at issue were brake and clutch pads (friction products) containing asbestos, a substance that caused cancer to thousands of people exposed to it. The manufacturer was Bendix, a Michigan-based corporation, which in 1999 was acquired by Honeywell, a New Jersey-based corporation.
The conflict centered on the method of allocating responsibility for coverage among several insurers that insured Bendix’s operations during a multiyear period during which it produced the pads. That period ended in 1987, but the harmful effects of asbestos manifested themselves many years or decades later, and up to the present. The parties and the court confined their choice-of-law discussion between two states: Michigan, which was the place of Bendix’s headquarters and the place where it purchased the insurance policies, and New Jersey, which was the place of Honeywell’s headquarters since 1999, and which the court characterized as the place of performance of the insurance contract. New Jersey followed the “continuous-trigger” method of allocating liability among insurers, whereas Michigan followed a “time-ofthe risk” method. Without getting into the complexities of explaining these two methods, suffice to say that the difference between them amounted to many millions of dollars and that the New Jersey method favored Honeywell, while the Michigan method favored the insurers.
The court resolved the conflict by holding that New Jersey law governed. In evaluating the § 188 contacts, the court discounted the place of contracting, Michigan, noting that “[s]tanding alone, the place of contracting is a relatively insignificant contact . . . particularly . . . where, as here, the insured risk is not site-specific.”354 Of course, Michigan was not only the place of contracting, but also the place of negotiation, as well as the principal place of business of Bendix when it purchased the policies. Nevertheless, the court concluded that the weighing scale leaned toward New Jersey because it had two
“stronger” contacts.355 It was the principal place of business of the insured’s successor
(Honeywell) and the place of performance.
The court then examined the factors of § 6 of the Restatement (Second) and concluded that they too favored the application of New Jersey law. The court noted that the application of the New Jersey method of allocating responsibility among insurers “maximiz[ed] insurance resources, encourage[ed] the spreading of risk throughout the insurance industry, [and] promot[ed] the purchase of insurance when available.”356 Applying this method, the court concluded, would benefit New Jersey because it would “enhance[e] the interests of a New Jersey insured, and the claimants who were injured by progressive asbestos-related disease.” By contrast, the court noted, it was “far from clear what interest Michigan ha[d] in insisting that its allocation methodology apply in this insurance dispute, which no longer involve[d] a Michigan-based company.”357 For this and other reasons, such as a state’s “interest in simple justice” and the protection of the parties’ justified expectations,358 the court concluded that New Jersey law should govern.
In Travelers Indemnity Company v. CNH Industrial America, LLC, 359 the underlying dispute also involved a manufacturer’s liability for asbestos-containing products, but the precise issue was the validity of anti-assignment clauses contained in the insurance policies. Tenneco, a Texas based company, purchased insurance policies from Travelers naming as insureds all of Tenneco’s wholly owned subsidiaries, including J.J. Case, a Wisconsin-based manufacturer. Later, J.J. Case assigned the policies to CNH, who then sued Travelers in Delaware seeking coverage. Invoking the antiassignment clauses in the policies, Travelers refused to provide coverage. The clauses were enforceable under Texas law, but not under Wisconsin law. The lower court treated J.J. Case as the insured and applied Wisconsin law.
The Delaware Supreme Court reversed, holding that Texas had the most significant relationship and its law should govern.
The court built on, and reiterated, the approach it developed in an earlier case,
which was based on the Restatement (Second).360 That approach consists of three steps. In the first step, the court begins with the presumption of § 193 in favor of the site of the insured risk. However, the court noted, that presumption is “at best, directionally helpful but arguably not conclusive” when, as in this case, the policy provides “broad-based coverage across many jurisdictions for a company’s enterprise-wide risks.”361 In the second step, the court evaluates the contacts of § 188. In this case, the court concluded that the evaluation “point[ed] strongly towards Texas” because “Tenneco and Travelers negotiated the insurance policies in Texas; paid the premiums from Texas; and managed the insurance program from Texas, where Tenneco is domiciled, incorporated, and conducts business.”362 In the third step, the court considers the policy factors of § 6. The court concluded that, in this case, protecting the parties’ expectations “at the time of contracting363” was the most important factor. The court reasoned that this goal was “best served by providing terms in the contract with a meaning that does not vary based on the happenstance of the locations of a particular claim.”364 Applying the law of the states in which each of Tenneco’s subsidiaries were located would allow “the meaning of the contract[s] to vary arbitrarily,” whereas applying the law of Texas would provide “certainty, predictability and uniformity,” as well as “ease in the determination and application of the law.”365
Among the hundreds of cases involving automobile insurance conflicts, State Auto Property & Cas. Ins. Co. v. Moser,366 a case involving the question of insurability of punitive damages, may be the only one worth discussing. The case arose out of a Pennsylvania accident that caused the death of a Pennsylvania domiciliary. However, the main dispute was between the owners of the Maryland car that caused the accident and their own insurer. The insurer intervened in the Pennsylvania litigation between the victim’s estate and the car owners, seeking a declaration that the insurer was not obligated to provide coverage for punitive damages that might be assessed against the owners. The car was registered in Maryland and insured through a policy issued to the owners and delivered to them in Maryland. However, at the time of the accident, the car was driven by a Pennsylvania resident who worked as an independent contractor of the owners, and, with their permission, kept the car at his Pennsylvania residence. Maryland law allowed insurance coverage for punitive damages. However, Pennsylvania law allowed such coverage only for claims arising from vicarious liability and prohibited coverage for claims arising from direct liability. Because the victim’s estate asserted punitive damage claims against the owners on the basis of both direct and vicarious liability, a conflict existed between the laws of the two states.
The Pennsylvania court acknowledged that this was a contractual conflict because “[t]he central question . . . revolve[d] around the scope of the insurer’s coverage obligation towards its insureds.”367 Nevertheless, the court concluded that, in Pennsylvania, the choice- of-law analysis is “essentially the same for contract and tort actions and focuses on the significance of the state contacts and the respective interests of the competing states.”368 Employing this analysis, the court concluded that Maryland law should govern “[b]ecause Maryland [was] the state of issuance for the applicable insurance policies.”369 The court also concluded that Maryland’s allowance of insurance coverage for punitive damages arising from direct liability did not offend Pennsylvania’s public policy.
In holding that Maryland law should govern, the court expressed some hesitation because the car was stationed in Pennsylvania, more or less permanently and with the owners’ permission. The court noted that, “[u]nder these circumstances, . . . [one] may infer the inevitability of frequent Pennsylvania travel and the related possibility of a motor vehicle accident within Pennsylvania.”370 In turn, this would suggest that “Maryland would seem to have a diminished interest” in applying its law and that “[the owners’] reliance on Maryland insurance law would be subject to question.”371 Nevertheless, the court felt constrained by a previous Pennsylvania case that had applied the law of the state of the insurance contract under similar circumstances.372 Indeed, as in previous years, the vast majority of cases involving this scenario, namely a car insured in one state and involved in an accident in another state, tend to apply the law of the state of the insurance contract, rather than the law of the state of the accident. This year was no exception.373
I. Nazi-Looted Art
Two cases involved efforts to recover artwork looted by the Nazis during the Holocaust.374 In the first case, Philipp v. Federal Republic of Germany,375 the object of the dispute was a unique collection of medieval relics and devotion art, which was owned by a consortium of Jewish art dealers and which the infamous Hermann Göring “purchased” at a forced sale for about one third of its actual value, in 1935. In 2014, the dealers’ heirs sought to recover the collection by resorting to a German alternative dispute resolution Commission set up for
similares cases. The Commission’s ruling was unfavorable and, rather than continuing to pursue their claim in Germany, the plaintiffs sued Germany in the United States, along with the state-controlled museum that housed the collection in Berlin. Germany moved to dismiss, arguing that it enjoyed immunity from suit under the Foreign Sovereign Immunities Act (FSIA), that international comity required the court to decline jurisdiction until the heirs exhausted their remedies in German courts, and that United States foreign policy preempted the heirs’ state-law causes of action. The district court rejected all three arguments and the D.C. Circuit affirmed.
First, the court held that it had jurisdiction under the “expropriation exception” of the FSIA, which applies when “‘rights in property taken in violation of international law are in issue,’” and “there is an adequate commercial nexus between the United States and the defendant.”376 In Simon v. Republic of Hungary,377 a similar case involving Hungary, the court held that an “intrastate” taking of property did not violate international law unless the taking “amounted to the commission of genocide.”378 In Philip, Germany argued that the taking of art cannot amount to genocide, that a forced sale cannot be genocidal, and that, unlike the 1940-45 period in Hungary, there was no genocide of Jews in 1935 Germany. After extensive methodical discussion, the court rejected all of these arguments.
The court then addressed the second requirement of the expropriation exception to the FSIA, which provides that there must be an adequate commercial nexus between the United States and the defendant. With regard to foreign states themselves, this requirement is satisfied only when the property is present in the United States. Because the collection was housed in Berlin, the court dismissed Germany from the case. However, with regard to the instrumentalities of foreign states, such as the museum in this case, it is not necessary for the property to be situated in the United States. Consequently, the case will continue with the museum as the only defendant.
The D.C. Circuit also rejected Germany’s argument that the plaintiffs must exhaust their domestic remedies before pursuing their claim in the United States. In so holding, the court distinguished this case from other cases that required exhaustion of local remedies.379 The court also disagreed with the position taken by the U.S. Government in a similar case. Finally, the court also distinguished this case from American Insurance Association v. Garamendi,380 which held that the judicial pursuit of insurance claims by Holocaust survivors interfered with the federal government’s conduct of foreign affairs and was therefore preempted. The court noted that, while in Garamendi there was an “express federal policy” of disfavoring domestic litigation of the insurance claims, in cases involving Nazi-era art- looting claims, “the United States has repeatedly made clear that it favors such litigation” by, for example, extending the applicable statutes of limitation and by exempting these claims from the jurisdictional immunity otherwise afforded certain art collections temporarily exhibited in the United States.381
In Von Saher v. Norton Simon Museum of Art at Pasadena,382 the plaintiffs did not fare as well as the Philip plaintiffs in their lawsuit against a California museum. Von Saher involved two Renaissance masterworks—“Adam” and “Eve”—painted by Lucas Cranach the Elder, and owned by Dutch Jews. Initially, the paintings had the same fate as the Philp collection, i.e., a forced sale to Hermann Göring during World War II. The difference was that, for a long period after the war, the owners’ heirs consciously and strategically decided not to avail themselves of several formal administrative and judicial processes and opportunities provided by the Dutch government to claim the paintings from its possession. In 1966, the Dutch government sold the paintings to Stroganoff, who claimed to be their previous owner before they were sold by the Soviet Union at a 1931 auction in Berlin. Stroganoff then sold the paintings to the California museum, the defendant in this case. In the 1990s, the heirs filed restitution proceedings in the Netherlands, but the Dutch court ruled against them. Later on, the government voluntarily returned some other paintings to the heirs, stating that the claim regarding Adam and Eve had been “settled” by the Dutch court’s decision. In 2007, the heirs sued the California museum in California.
The Ninth Circuit held that, under these circumstances, the act of state doctrine barred adjudication of the plaintiffs’ claims. This doctrine is a “rule of decision” requiring that “the acts of foreign sovereigns taken within their own jurisdictions shall be deemed valid.”383 It is motivated by concerns that the judiciary, “by questioning the validity of sovereign acts taken by foreign states, may interfere with the executive branch’s conduct of foreign policy.”384 In this case, said the court, adjudication of the heirs’ claims “would necessitate declaring invalid at least three official acts of the Dutch government performed within its own territory.”385 The court took note of the U.S. State Department’s position that upholding the Dutch government’s actions was “important for U.S. foreign policy” and that the United States had “a substantial interest in respecting the outcome of the [Dutch] proceedings.”386 The court concluded that “[r]eaching into the Dutch government’s post-war restitution system,” would “embroil[] [American] courts in re-litigating long-resolved matters entangled with foreign affairs,” and would “require making sensitive political judgments that would undermine international comity.”387
J. Domestic Relations
1. Marriage and Divorce
An Arkansas statute provides that “All marriages contracted outside this state that would be valid by the laws of the state or country in which the marriages were consummated and in which the parties then actually resided shall be valid in all the courts in this state.”388 In Stovall v. Preston,389 the outcome depended on the italicized phrase. The parties were validly married in Louisiana, but they never resided there. The Arkansas Court of Appeals recognized the problem but felt constrained by two Arkansas Supreme Court cases which, relying on the Restatement (Second), had recognized out-of-state marriages under similar circumstances. The Court of Appeals did likewise. Equitable considerations seemed to support this result (although the court did not base its decision on equity). The parties had lived in Arkansas as husband and wife for 27 years before this proceeding. The wife’s son challenged the validity of her marriage when the husband objected to the son’s petition to be appointed guardian of his 83-year old mother.
In Blalock v. Sutphin,390 the spouses lived all of their married life in Alabama, but they divorced ten months before the husband’s death. Before the divorce and while he was working in Tennessee, the husband purchased a whole life insurance policy and designated his wife and daughter as beneficiaries. He did not change the beneficiary designation after the divorce. Under the law of Alabama, but not Tennessee, the divorce revoked the beneficiary designation of the former wife. The Alabama Supreme Court characterized the resulting dispute between the daughter and the former wife as contractual and noted that, under Alabama’s lex loci contractus rule, Tennessee law was in principle applicable. However, the court found that the application of Tennessee law would violate Alabama’s public policy and refused to apply it on that ground. Before holding for the daughter, however, the court had to dispose of the former wife’s argument that she and her former husband had reconciled and had formed a common law marriage in Alabama, two months before his death. After examining the evidence, the trial court had held that there was no common law marriage because the parties intended to go through a wedding ceremony. The Supreme Court held that the trial court’s holding was not clearly erroneous and ruled for the daughter.
In Adeleye v. Driscal,391 which was discussed earlier,392 the Texas court found that the parties had entered into a valid marriage by proxy in Nigeria, “even though neither party to the marriage was present at the ceremony.”393 According to the wife’s testimony, which the court accepted, “the custom in Nigeria is for the man to tell his family who he wants to marry, then his family writes to the woman’s family to ask for her hand in marriage, and dates are arranged for a ceremony.”394 In this case, the wife “introduced into evidence a letter from [husband’s] brother to her father, in which the brother stated that [husband] wished to marry [wife] and requested the father’s approval of their marriage.”395 The wedding took place two years later, and the parties lived together thereafter, albeit not always happily, until their divorce trial in Texas.
In Maghu v. Singh,396 the wife argued that her husband’s nonimmigrant status397 prevented him from becoming a Vermont domiciliary and thus Vermont lacked jurisdiction to entertain his petition for a no-fault divorce. The parties were married in India and lived in Vermont for six years, before the husband filed for divorce. The Vermont Supreme Court rejected the argument, after finding that the husband had met all the requirements for acquiring a domicile in Vermont. The court noted that most other states have held that a person’s immigration status is immaterial in acquiring domicile and that only one state requires that the person take affirmative steps toward securing a permanent resident visa. The court found that in this case the plaintiff qualified under either approach.
The wife’s remaining arguments were unique. She argued that, “in an exercise of deference, or ‘comity,’ to the Indian legal system,” the court should have dismissed the husband’s no-fault divorce petition because the couple had married in India, which recognizes only fault grounds for divorce.398 The court patiently addressed and rejected the argument. The court reasoned, inter alia, that acceptance of the argument “would require Vermont’s family courts to decline hearing any divorce premised on grounds different from the law under which the couple originally married,” and this would mean that “[a]n untold number of Vermont residents would be denied access to a divorce under Vermont law— resident aliens and citizens alike.”399
The wife’s next argument was a rewording of the previous one. She argued that “the contractual doctrine of lex loci demanded that the court look to the divorce laws of the jurisdiction in which the couple were married,”400 in this case India. Because India did not allow a no-fault divorce, the wife argued, the court should dismiss the action. The court responded as follows:
[W]e will not elevate a common-law contractual doctrine over statutory requirements regarding divorce established by our Legislature. A marriage is not simply a type of bilateral contract. Marriage is the union of two parties pursuant to parameters set by the state, infused with private interests and public policy considerations. . .. [O]ur Legislature, as a reflection of the electorate, has the role of prescribing the parameters of marriage—and its dissolution—in this state. We will not outsource this role.401
Finally, the court also rejected the wife’s argument that the grant of a no-fault divorce contrary to India’s Hindu Marriage Act would impinge on her free exercise of religion. “Quite the opposite,” said the court, “it would be constitutionally problematic, to say the least, if we began to decline access to a divorce from an otherwise qualified domiciliary on the basis of the religious convictions of the other party.”402
2. Marital Property
In Gal v. Gal,403 the parties married in Israel and signed a premarital agreement stating that Israel’s Spouses Property Relations Law would govern their future marital property regime. Four years later, the husband filed a petition for dissolution in Florida and the wife filed a motion to declare the premarital agreement invalid on ground of unconscionability. In granting the wife’s motion, the trial court applied Florida law because “[n]either party has sought to challenge the Agreement in Israel” and “all pleadings have been filed in Florida.”404 The Court of Appeals reversed, reasoning that the trial court should have honored the Israeli choice-of-law clause unless the application of Israeli law would contravene “a strong Florida public policy.”405 Instead of undertaking such an analysis, the trial court, “relying . . . on convenience,” applied Florida law “merely because both parties filed their pleadings in Florida.”406 The Court of Appeals remanded the case for further proceedings “consistent with the premarital agreement.”407
In Hutchins v. Hutchins,408 the parties executed a premarital agreement in Nevada while they were domiciled there. The agreement contained a Nevada choice-oflaw clause. Fifteen years later, the spouses moved to Montana, where, eight years later, the wife filed for divorce and challenged the enforceability of the premarital agreement. The Montana court, applying Montana law, held the agreement enforceable. The Montana Supreme Court affirmed the holding but pointed out the trial court’s error in not honoring the Nevada choice-of-law clause. The Supreme Court noted that the clause was enforceable because none of the invalidating grounds provided in § 187 of the Restatement (Second) were present. Applying Nevada law, the court held the premarital agreement enforceable and then affirmed the trial court’s valuation and apportionment of the marital property under Montana law.
In Larsen v. Giannakoulias,409 which is partly discussed above,410 the Tennessee court applied the law of New Mexico, where the parties were domiciled when they signed the premarital agreement and before they moved to Tennessee. Because New Mexico law prohibited the anticipatory waiver of alimony and the agreement waived that right, the court held that part of the agreement unenforceable. However, that part was severable from the rest of the agreement, which was otherwise enforceable. For example, in another provision in the agreement the parties waived any right to each other’s retirement benefits. That provision was enforceable under both New Mexico and Tennessee law, and the court allocated those benefits to the spouse who earned them. The court then upheld the trial court’s valuation and apportionment of the marital estate under Tennessee law.
In Ravasizadeh v. Niakosari,411 a Massachusetts court rendered a judgment dividing the divorcing spouses’ marital property under Massachusetts’ equitable distribution law. The trial court included in the marital estate immovables situated in Iran, which the husband had inherited before his marriage. The court awarded to the wife one-half of the appreciation in value of those immovables that occurred during the marriage. On appeal, the husband argued that the Iranian immovables were not part of the marital estate and thus they should not be included in the division. The appellate court rejected the argument, noting that the marital estate “includes all property to which a party holds title, however acquired,” and that the trial court had “broad discretion to determine how to divide the entire estate equitably.”412 This could include dividing the whole value of those immovables or, as in this case, only the appreciated value.
3. Adoption and Succession
Estate of Obata413 is a very interesting case involving the effects of a type of a Japanese extrajudicial adult adoption known as yōshi-engumi. The central person in the story was Tomejiro, who was born into the Nakano family in 1886. In 1911, at the age of 25, Tomejiro was “adopted” by his biological sister and her husband (the Obatas), apparently in order to eventually become the head of the Obata extended family or “house.” Tomejiro’s yōshi- engumi was recorded in the family registry of the Obata house, but his name was not removed from his biological father’s house (the Nakanos). Later, Tomejiro immigrated to California and eventually died intestate while domiciled there. This case concerned the inheritance rights to the estates of his two daughters, who also died intestate while domiciled in California. Because the daughters never married and had no descendants, their estates would be inherited by Tomejiro’s heirs. The dispute was between Tomejiro’s biological relatives (the Nakanos) and his adopted relatives (the Obatas).
The Nakanos argued that, under Japanese law, a yōshi-engumi, which is effected without judicial participation or approval: (1) does not produce a permanent relationship with the adopter; and (2) does not terminate the adoptee’s relationship with his or her biological family. The court thought that both of these arguments were “immaterial.”414
Regarding the first argument, the court concluded that a yōshi-engumi created the same relationship between the adopter and the adoptee as the relationship between the adoptee and his or her biological relatives. The court based this conclusion on: (1) an article of the Japanese Civil Code of 1896 which provided that “[a]n adopted child acquires the status of a child in wedlock of his/her adopted parent(s),”415 which the court interpreted as encompassing not only adoptions of children but also “adult adoptions”;416 and (2) an excerpt from a Japanese legal history book, which stated that “the adoptee became a member of its adoptive father’s ‘house’ . . . and the same blood kinship as between the adoptive parents and their relatives existed between the adoptive parents and the adopted child.”417
Regarding the second argument, the court concluded that the fact that a yōshiengumi did not terminate the adoptee’s relationship with his biological relatives under Japanese law was immaterial because that issue was a matter of succession law, not adoption law, and as such it was governed by California law, not Japanese law. In the court’s words: “[w]hether Tomejiro’s adoption would have terminated his relationship with his biological parents under Japanese law . . . is largely immaterial . . . [because] the rules of inheritance are determined by the laws of the jurisdiction of domicile of the decedent at time of death.”418 The court quoted from another case a statement to the effect that “If the law of the state in which the adoption took place provides that the adoption creates a parent-child relationship ‘for all purposes,’ the adopted person acquires the same status as a biological child.”419 Once that relationship is established, the court seemed to say, California law takes over and bestows on the relationship the effects or incidents California law provides. In this case, the pertinent provision of California law was § 6451 of the Probate Code, which provided that, subject to exception not applicable here, “[a]n adoption severs the relationship of parent and child between an adopted person and a natural parent of the adopted person.”420
Based on the above reasoning, which is questionable despite the court’s commendable efforts to understand Japanese law,421 the court affirmed the trial court’s decision, which had ruled in favor of the adoptive relatives.
4. Child Custody and the Hague Convention
Guimaraes v. Brann422 was one of several 2018 cases involving the 1980 Hague Convention on the Civil Aspects of International Child Abduction.423 The story is as sad as these stories usually are, but the outcome turned out to more expensive than usual for the abducting parent. The parents were domiciled in Texas, where their only child was born. When the child was three-years old, the mother sued the father for divorce. During the pendency of the proceeding, the court issued an order granting temporary joint custody of the child to the parents and prohibiting the child’s removal from the particular Texas county. A few months later, the mother persuaded the father to allow her to take the child to Brazil for a few days and then return it to Texas. Instead of returning to Texas, the mother kept the child in Brazil and initiated custody proceedings there. The father appeared in the Brazilian proceedings and requested the child’s return under the Hague Convention. The Brazilian court refused to order the return of the child, invoking two exceptions from the obligation of signatory countries to order the return of a wrongfully removed child to its home state. The first was the “well-settled” exception of Article 12 of the Convention, under which the court may, under certain conditions, allow the child to remain in the new country if the child has become settled in its new environment. The second exception is the “grave risk” exception of Article 13, under which the court may allow the child to remain if “there is a grave risk that his or her return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation.”424
In the meantime, the Texas case proceeded to trial, in which the mother appeared through counsel.425 The trial court: (1) granted divorce and divided the marital property; (2) awarded joint custody to both parents but gave to the father the exclusive right to designate the child’s residence; and (3) awarded to the father $425,767 in costs, expenses and attorneys’ fees, and $ 2 million in compensatory (plus $250,000 in exemplary) damages for mental anguish and suffering. The wife appealed, but the appellate court affirmed all parts of the trial court decision.
Regarding the child custody part of the case, the Texas court held that international comity did not require deference to the Brazilian judgment. The court noted that, under a test established by American federal cases, “a court may decline to extend comity if the foreign court clearly misinterprets the Hague Convention, contravenes the Convention’s fundamental premises or objectives, or fails to meet a minimum standard of reasonableness.”426 The court found that the Brazilian judgment failed this test. First, regarding the “well-settled” exception, the Brazilian court misapplied Article 12 of the Convention, which allows this exception only if the request for the return of the child is filed more than one year after its wrongful removal.427 In this case, the father filed his request within three months from the removal. Regarding the “grave risk” exception, the court found that the Brazilian court misinterpreted Article 13 of the Convention by adopting an “over- expansive” reading of the exception rather than requiring clear and convincing evidence of severe potential harm. This exception, the Texas court reasoned, “is not license for a court in the country in which the children are being held to speculate about where the children would be happiest.”428 In this case, said the court, the Brazilian court “improperly based its assessment of ‘grave harm’ on what it perceived to be the best interest of the child, i.e., living with his mother, instead of being cared for by a babysitter while his father worked. This is exactly the sort of best-interest review the Hague Convention is designed to prohibit.”429
The “well-settled” exception was the main issue in two other cases, although in both of them the child’s wrongful removal (by the mother) was from a foreign country to the United States. In both cases, the father’s petition requesting the child’s return was filed after one year from the child’s wrongful removal. In the first case, Fernandez v. Bailey,430 the father filed the petition two-and-half years after the removal from Panama. Nevertheless, the court ordered the return of the children to Panama. In the second case, Monzon v. De La Roca,431 the father filed the petition sixteen months after the removal from Guatemala. Nevertheless, the court denied the petition to return the child to Guatemala. The two cases illustrate the degree of discretion a court has in ordering the return of the child and the extent to which the circumstances of the individual case can affect the exercise of that discretion.
In Fernandez, the mother was a repeat offender, and the court’s decision against her can be explained by what in other areas of the law is known as the “unclean hands” doctrine, although the court did not use this term. The mother first abducted her twin boys from Panama when they were nine months old and took them to Missouri, where a court eventually ordered their return to Panama under the Hague Convention. Then, when the boys were five, the mother abducted them again and took them to Florida, while a custody proceeding was pending before a Panamanian court, which had issued an order prohibiting their removal from Panama.432 It took the father two-and-a-half years to discover their whereabouts and to petition a Florida court to order their return.
In reversing the trial court decision denying the petition, the Eleventh Circuit provided a thorough exposition of the meaning of the “well-settled” exception under the Convention and the implementing statute, ICARA.433 The court pointed to Article 18 of the Convention, which provides that “[t]he provisions of this Chapter [Chapter 3, which includes Article 12] do not limit the power of a judicial or administrative authority to order the return of a child at any time.”434 The court concluded, as have most other circuit courts,435 that Article 18, when read in conjunction with Article 12, grants courts discretion to order the return of a wrongfully removed child even if it is well-settled in the new environment. The court reasoned that this reading was consistent with one of the Convention’s primary objectives, which was “to prevent an abducting parent from wrongfully removing a child to a friendlier forum for the adjudication of a custody dispute.”436
The court then described the “unique”437 circumstances of this case, which included the mother’s “audacity”438 exhibited by “a second wrongful removal within five years in violation of a court-ordered exit restriction,” the “ongoing involvement of Panamanian courts” in this case, and the father’s inability, because of his immigration status, to come to the United States to see his boys or to litigate custody issues in person.439 The court concluded that, under these circumstances, the district court’s refusal to order the return of the boys was “contrary to the aims and objectives of the Convention and constituted an abuse of discretion.”440
Compared to Fernandez, the blame and the equities in Monzon were not as one-sided. After the parents’ divorce and while the father was under a temporary restraining order for domestic violence, the wife moved from Guatemala to New Jersey and took the child with her against the father’s refusal to consent. Within weeks, the father filed a request for the return of the child with the Guatemalan authorities, which transmitted it to the U.S. authorities. However, because he did not know where the wife was, he did not sue her in New Jersey until 16 months later, i.e., after the expiration of the one-year, which is so critical under the Convention. The father argued that his request to the Guatemalan authorities should be treated as the initiation of proceedings under Article 12 of the Convention, or that the one- year period should be tolled for equitable reasons. The court rejected the argument, first because Section 9003(b) of ICARA requires the filing of “a civil action . . . in any court which has jurisdiction of such action and which is authorized to exercise its jurisdiction in the place where the child is located,”441 and second because, under established precedent, the one- year period is not subject to tolling.442
The mother invoked the same exceptions to the obligation to return the child as in Guimaraes, namely the “well-settled” exception of Article 12 and the “grave risk” exception of Article 13 of the Convention. A proper reading of the Convention leaves no doubt that if either one of these exceptions is satisfied, the court has the discretion not to order the return of the child. However, in implementing the Convention, ICARA joined these two exceptions with the conjunctive “and” rather than the disjunctive “or.” Section 9003(e)(2) of ICARA provides as follows:
- In . . . an action for the return of a child, a respondent who opposes the return of the child has the burden of establishing–by clear and convincing evidence that one of the exceptions set forth in article 13b or 20 of the Convention applies; and
- by a preponderance of the evidence that any other exception set forth in article 12 or 13 of the Convention 443
Article 13b of the Convention contains the “grave risk” exception, whereas Article 12 contains the “well-settled” exception. Because subparagraphs (A) and (B) are joined by the conjunctive “and,” the father argued that the mother had to satisfy both subparagraphs. After extensive discussion, the court properly rejected the argument, reasoning, inter alia, that, in enacting ICARA, Congress did not intend to alter the remedies provided by the Convention. Finally, after examining the trial court’s record and analysis, the appellate court concluded that the trial court did not commit error in finding that the child was well settled in the new environment and denying the father’s request to return the child to Guatemala.444
III. RECOGNITION OF FOREIGN JUDGMENTS AND AWARDS
A. Foreign-Country Judgments
AlbaniaBEG Ambient Sh.p.k. v. Enel S.p.A.466 is probably the most important decision of the year on recognition and enforcement of foreign-country judgments. In this case, New York’s intermediate court, the Appellate Division, retreated from the position taken in its 2014 decision in Abu Dhabi Commercial Bank PJSC v. Saad Trading, Contr. & Fin. Servs. Co.,467 which was discussed in that year’s Survey. In Abu Dhabi, the court held that a New York court may recognize an otherwise eligible foreign judgment even if the court does not have jurisdiction over the defendant or the defendant’s assets. In AlbaniaBEG, the court held that the Abu Dhabi holding should be restricted to “the circumstances that were presented by that case,”468 in which the judgment debtor did not raise any grounds for non-recognition of the foreign judgment. By contrast, in this case the judgment debtor raised five different and non- frivolous grounds for non-recognition. The court held that, under these circumstances, the judgment creditor must establish that the New York court has jurisdiction over the defendant or its assets. A well-reasoned article authored by Professors Silberman and Simowitz, from which the court quoted repeatedly and extensively, deserves credit for the court’s retreat.469
AlbaniaBEG involved a nearly $600 million Albanian judgment against Italian companies in a dispute arising from the construction of a power plant in Albania. The Albanian court had ruled for the Albanian plaintiff, even though a previous Italian judgment had confirmed an arbitral award against the plaintiff’s predecessor. The Albanian plaintiff sought recognition of the Albanian judgment in New York. The defendants argued that, because they had neither contacts with nor assets in New York, the New York court did not have jurisdiction to recognize the judgment. In addition, the defendants invoked five grounds for non-recognition under New York’s version of the Uniform Act,470 including corruption and lack of impartiality of the Albanian courts, violation of an arbitration clause, and the existence of a previous inconsistent judgment.
The defendants’ jurisdictional objection was broader that it needed to be. They argued that that the Supreme Court’s decision in Daimler445 “require[d] the dismissal of this [recognition] proceeding on the ground that, under Daimler, they are not subject to general personal jurisdiction in New York.”446 To be sure, general jurisdiction is not necessary, as long as there is a basis for specific jurisdiction or, as noted below, quasi in rem jurisdiction. In any event, the defendants’ objection provided a good opportunity for the court to clarify the difference between jurisdiction to entertain a cause of action and enforcement jurisdiction. After noting that Daimler involved only the first type of jurisdiction, the court concluded that Daimler’s holding should not be extended to enforcement jurisdiction. The court correctly noted that the Supreme Court’s decision in Shaffer447 supported this differentiation between the two types of jurisdiction. In Shaffer, which involved the former type of jurisdiction, the Court held that quasi in rem jurisdiction was unconstitutional (in the absence of connections between the defendant’s forum assets and the cause of action) but also noted, in the famous footnote 36, that quasi in rem jurisdiction was constitutional for enforcement proceedings (even in the absence of such connections).
Having resolved this broader question, the New York court turned to the problem created by its own earlier decision in Abu Dhabi. For the sake of completeness, it should be noted that, in Abu Dhabi, the court expressed some pride about New York’s “traditional generosity”448 in recognizing foreign judgments. The court held that a party seeking recognition in New York of a foreign money judgment (whether of a sister state or a foreign country) need not establish a basis for the exercise of personal jurisdiction over the judgment debtor by the New York courts, because no such requirement can be found in the [New York’s Uniform Act], and none inheres in the Due Process Clause of the United States Constitution, from which jurisdictional basis requirements derive.449
Upon further reflection, which was prompted by the Silberman & Simowitz article, the court decided that “Abu Dhabi should not be read so broadly.”450 In fact, Abu Dhabi should not have spoken so broadly. AlbaniaBEG is more of a retreat from, rather than a clarification of Abu Dhabi. For example, the AlbaniaBEG court walked back much of the above-quoted statement from Abu Dhabi, when it stated that
Because we believe that the Constitution requires, as a matter of due process, a jurisdictional nexus with New York as a prerequisite to maintenance in this state of . . . proceeding to recognize and enforce a foreign country judgment of contested validity, it is of no moment that [New York’s Uniform Act] does not expressly provide that lack of such a jurisdictional nexus constitutes a defense in such a proceeding.477
In any event, the court distinguished Abu Dhabi on the ground that the judgment debtor in that case “did not raise any . . . grounds for nonrecognition of a foreign country judgment.”451 Under those circumstances, the court reasoned, the New York enforcement proceeding “imposed no hardship” on the debtor because “there [was] nothing to defend” and the court’s role was confined to the “ministerial function” of “according recognition to a foreign judgment of unquestioned finality, conclusiveness and validity.”452 By contrast, the court continued, in AlbaniaBEG in which the debtor had raised five non-frivolous grounds for non-recognition “there is something to defend, and the court’s function ceases to be merely ministerial.453 Consequently, “[t]]o require a defendant to litigate such substantive issues in a forum where it maintains no property, and where it has no contacts that would otherwise subject it to personal jurisdiction, would ‘offend [the] traditional notions of fair play and substantial justice’ at the heart of the Due Process Clause.”454
In conclusion, the court moved in the right direction by excising some overbroad statements in the Abu Dhabi decision and closing part of the door that decision had opened. However, because AlbaniaBEG is only a correction rather than a repudiation of Abu Dhabi, the two decisions will have to coexist, at least until the New York Court of Appeals takes up this issue. In the meantime, the combined effect of the two decisions will be as follows:
- If, as in Abu Dhabi, the judgment debtor does not raise any grounds for nonrecognition under New York’s Uniform Act, a New York court will entertain an action to enforce the judgment, even if the court has no jurisdiction over the defendant or its
- If, as in AlbaniaBEG, the judgment debtor raises non-frivolous grounds for non- recognition under New York’s Uniform Act, a New York court will not entertain an action to recognize the judgment unless the court has jurisdiction over the defendant or its assets.
In Harvardsky Prumyslovy Holding, A.S.-V Likvidaci v. Kozeny,455 a case involving a Czech judgment, the same court reiterated its AlbaniaBEG holding that “there must be either an in personam or an in rem jurisdictional basis for maintaining the recognition and enforcement proceeding . . . in New York.”456 However, the court found that the judgment debtor had waived its jurisdictional objection and, even if it had not, New York had in rem jurisdiction because the debtor’s alter ego had approximately $22 million in a New York bank account, and the creditor sought to enforce the judgment against that account.
The debtor also argued that, “because the Czech court never had custody of him and he was tried in absentia,” the Czech judgment was “rendered under a system which does not provide . . . procedures compatible with . . . due process”457 and thus should not be recognized. The court rejected the argument, reasoning that New York’s version of the Uniform Act “refers to a system which does not provide procedures compatible with due process” and “[t]he Czech legal system provides procedures compatible with due process.”458 The court concluded that this system-wide defect “cannot be relied upon to challenge the legal processes employed in a particular litigation on due process grounds.”459 By contrast, the new Uniform Act of 2005, which New York has not adopted, provides an additional ground for non-recognition: if “the specific proceeding in the foreign court leading to the judgment was not compatible with the requirements of due process of law.”460
As noted in the surveys of previous years, not every state shares the view that the enforcing court must have personal jurisdiction over the judgment debtor.461 For example, in Haaksman v. Diamond Offshore (Bermuda), Ltd.,462 a Texas court held that, “although a judgment debtor may contest recognition by arguing that the foreigncountry court lacked personal jurisdiction over the judgment debtor, the judgment debtor may not assert that the court of the state in which the judgment is filed does not have in personam jurisdiction over the judgment debtor.”463 In Gesswein v. Gesswein,464 a case involving a sister-state judgment, the Texas court quoted approvingly this statement and held to the same effect: “A defendant may not defeat an enforcement action . . . on the basis that the defendant lacks minimum contacts with the state of the enforcing court. Accordingly, [the defendant’s] argument that he did not have minimum contacts with Texas is of no consequence here.”465
In Attorney General of Canada v. Malone, 466 the question was the life span of a judgment as fixed by a statute of limitation. Section 1721 of the California Code of Civil Procedure, which is based on § 9 of the Uniform Act of 2005, provides that an action to recognize a foreign-country judgment must be brought “within the earlier of the time during which the foreign-country judgment is effective in the foreign country or 10 years from the date that the foreign-country judgment became effective in the foreign country.”467 In 2014, the Attorney General of Canada filed an action in California seeking to recognize a 2003 Canadian judgment against a defendant who defaulted on his student loans. This filing was obviously late, but in 2013, the plaintiff had timely renewed the judgment in Canada. Nevertheless, the California court held that the recognition action was barred by the above- quoted § 1721.
The court based its decision on the fact that the plaintiff requested recognition of the 2003 judgment (whose life had been extended by the 2013 renewal), rather than of the 2013 judgment that renewed it. The court reasoned that, although the Canadian renewal extended the life of the judgment in Canada, “California law does not provide that the renewal of a foreign judgment extends the limitations period for a recognition action in California beyond the 10–year period.”468 The court noted that: (1) Canadian law determined whether the renewal was a new judgment rather than an extension of the old one; and (2) if, under Canadian law, the renewal qualified as a new judgment then the California statute of limitation would not bar its recognition. In response to the court’s question the plaintiff stated that the renewal was not a new judgment. Based on that admission, the court concluded:
[B]ecause the Attorney General filed the complaint to domesticate the 2003 judgment more than 10 years after it became effective and has not shown that the renewal order is a new judgment under Canadian law, she fails to overcome the statute of limitations defense and is not entitled to summary judgment.469
The opinion is unduly technical and conclusory. Fortunately, the court designated it as “non-publishable.”
Among other cases involving foreign judgments, one case denied recognition of a Belarussian judgment because the defendant did not receive notice of the foreign proceeding,470 two cases granted recognition of a Russian471 and a Mexican judgment, respectively, after finding that, despite claims to the contrary, the defendant did receive adequate notice,472 and one case granted recognition of a Costa Rican judgment after finding that the defendant did not provide sufficient evidence to substantiate his claim that the judgment was tainted by fraud.473
B. Sister-State Judgments
Schmierer v. The Tribal Trust474 involved the same pattern as Attorney General of Canada v. Malone, which is described in the preceding section, but the New Mexico court was more hospitable to the California judgment than the California court was to the Canadian judgment—and the Full Faith and Credit clause made the difference. The creditor of a 1989 California judgment, which was renewed in 1999, sought its enforcement in New Mexico in 2004. Under California law, the renewal did not create a new judgment but extended the enforceability of the old judgment, in this case until 2009. New Mexico had a 14-year statute of limitations “from the date of the judgment.”475 Because the California renewal was not a new judgment, the 14-year period expired in 2003, thus barring the 2004 enforcement action. That would be so, said the New Mexico court, “unless full faith and credit mandates a different result.”476 The court discussed in detail the three Supreme Court decisions on statutes of limitation and judgments—McElmoyle ex rel. Bailey v. Cohen,477 Union National Bank v. Lamb,478 and Watkins v. Conway.479 In the end, the court adopted what it considered the better view in interpreting these decisions, concluding as follows:
[While forum states may apply their own statutes of limitations for the enforcement of judgments, they must treat foreign judgments that are revived in the rendering state in the same manner as the rendering state would treat the revived judgment Thus, if the rendering state will enforce a judgment that has been revived under that state’s laws, then the forum state must do the same.480
In this case, the California judgment “remained subject to enforcement in the courts of California” until 2009, and “[t]herefore, under the Full Faith and Credit Clause [the] judgment was entitled to enforcement in New Mexico as well.”481
In Taracorp, Ltd. v. Dailey,482 the Oklahoma Supreme Court held that the holder of a 2007 Colorado judgment could enforce it in Oklahoma in 2016, although Oklahoma had a five-year statute of limitation for judgments.483 Colorado had a 20-year statute. The court based its decision on the spirit of Watkins v. Conway,484 although it reached the opposite result from Watkins. In Watkins, the holder of a Florida judgment, which was subject to a 20- year statute of limitation, sought its enforcement in Georgia one day after the expiration of Georgia’s 5-year statute. The Supreme Court held that Georgia did not violate the Full Faith and Credit Clause when it denied enforcement because all the judgment creditor had to do was return to Florida, revive his judgment, and come back to Georgia and file suit within five years. Apparently in order to spare the creditor from a return trip to Colorado, the Oklahoma Supreme Court held that the Colorado judgment was enforceable in Oklahoma, “because it [was] still valid and enforceable in the issuing state.”485
The hospitable attitude exhibited by the Schmierer and Taracorp cases is by no means universal. For example, in North Dallas Bank & Trust Co. v. Mabry,486 a Mississippi court summarily dismissed an action to enforce a Texas judgment because the action was filed after the expiration of Mississippi’s seven-year statute of limitation. The court reasoned that “efforts to enroll or enforce a foreign judgment outside the limitations periods set by [the Mississippi statute] are void—indeed . . . void ab initio.”487 The court did not even mention the Texas statute of limitation.
In EBF Partners, LLC v. Novabella, Inc.,488 the holder of a New York judgment sought its enforcement in Indiana. The judgment was entered pursuant to a confession of judgment contained in a cognovit note.489 Indiana had a strong public policy against enforcing cognovit notes. In fact, an Indiana statute made it a misdemeanor to “procure another” to execute a cognovit note or “to attempt to enforce within Indiana a foreign judgment based upon a cognovit note.”490 Nevertheless, the Indiana court held that, “in spite of Indiana’s aversion to cognovit provisions, a valid foreign judgment based on a cognovit note will be given full faith and credit in Indiana.”491 The court noted that several Supreme Court decisions dictated this result, including Baker v. General Motors Corp.,492 which stated that there is “no roving ‘public policy exception’ to the full faith and credit due judgments” of sister states.493
The Indiana court noted that the cognovit note provided that a confession of judgment could be entered only if permitted under the laws of the state in which the debtor resided and that in this case the debtor resided in Indiana. Under this provision, the New York court should not have entered the confessed judgment, but, as the Indiana court noted, the debtor’s only remedy was to challenge the judgment in New York, not in Indiana.494
In Toni 1 Trust, by Tangwall v. Wacker,495 the question was whether a state’s claim of exclusive jurisdiction over certain causes of action its law creates is binding on the courts of other states or on federal courts. The Alaska Supreme Court answered this question in the negative for such a claim established by an Alaska statute. The case involved a “self-settled spendthrift trust” established under an Alaska statute, which vested Alaska courts with exclusive jurisdiction over actions “against property of [the trust] or to avoid a transfer of property to [the trust].”496 A Montana state court and an Alaska federal bankruptcy court rendered judgments holding that certain transfers to the trust were fraudulent and the judgment creditors sought to enforce the judgments against the trust in Alaska. The trust argued that the judgments were unenforceable because the above-quoted statute deprive the Montana court and the federal court from jurisdiction to render the judgments. The Alaska Supreme Court rejected the argument.
With regard to the Montana judgment, the court relied on Tennessee Coal, Iron & R. Co.
- George,497which is familiar to conflicts teachers. In that case, the U.S. Supreme Court held that the Full Faith and Credit Clause did not require Georgia to abide by an Alabama statute that claimed exclusive jurisdiction over certain causes of action the statute had created. As the Court noted, “jurisdiction is to be determined by the law of the court’s creation, and cannot be defeated by the extraterritorial operation of a statute of another state, even though it created the right of action.”498Toni 1 was an even stronger case because the creditor’s actions was created by Montana law rather than Alaska law.499
With regard to the federal court judgment, the Alaska Supreme Court relied on Marshall v. Marshall,527 in which the U.S. Supreme Court held that Texas could not curtail the jurisdiction of federal courts by claiming exclusive jurisdiction over a cause of action created by Texas law. Again, Toni 1 was a stronger because the cause of action asserted by the federal judgment creditor was based on federal law, i.e., the federal bankruptcy code, rather than state law.
C. Foreign Arbitral Awards
In Daesang Corporation v. NutraSweet Company,500 New York’s intermediate court reversed a lower court decision that had vacated an international arbitral award for “manifest disregard of the law,” a ground which courts have inferred from the Federal Arbitration Act (FAA).501 The appellate court found that the lower court’s decision had violated the “emphatic federal policy in favor of arbitral dispute resolution” embodied in the FAA, “a policy that ‘applies with special force in the field of international commerce’”502 The court recited applicable precedent stating that this ground for vacating an award is a “severely limited” doctrine of “last resort,” which may be used only in cases of “apparent egregious impropriety on the part of the arbitrators,” rather than in cases of “a simple error in law or a failure by the arbitrators to understand or apply it.”503 Specifically, the court said, an award may not be modified or vacated on this ground unless the court finds “both that (1) the arbitrators knew of a governing legal principle yet refused to apply it or ignored it altogether, and (2) the law ignored by the arbitrators was well defined, explicit, and clearly applicable to the case.”504
In this case, the lower court violated both prongs of this test because: First, contrary to the lower court’s findings, the arbitrators “made a good-faith effort to apply [the law] to the facts of this case.”505 “At most” they “misapplie[d] it,” said the court, but this “constitutes nothing more than a mere error of law for which [an] award will not be set aside”;506 and, Second, the disputed legal issue was not sufficiently well defined and “any error by the arbitrators in deciding this issue . . . was far from obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator, . . . which is the standard for a showing of manifest disregard of the law.”507
In Republic of Argentina v. AWG Group LTD,508 the court confirmed an arbitral award against Argentina, after rejecting its challenge to the appointment of an arbitrator for “evident partiality.” The arbitrator was a member of the board of directors of an international financial-services company (UBS), which held “a sliver” of shares in two companies that were members of the AWG Group, along with five other companies. The Group argued, and the court agreed, that the arbitrator’s interest in the two companies was “remote—so remote, in fact, that she hadn’t even known about [it].”509 The court concluded that, because UBS’s interests in the two companies were “trivial,” the arbitrator’s interests in them were “insignificant” and thus “they could not have created evident partiality.510
Argentina also argued that the arbitrators exceeded their authority because they rejected its necessity defense without providing an explanation. The court dismissed the challenge because Argentina did not point to anything (other than the arbitrators’ failure to supply reasons) that suggested that the arbitrators exceeded their authority. The court noted that, under applicable precedent, an arbitral panel’s decision “may be upheld even if it offered no explanation at all because the alternative, requiring a particular level of detail for every response to each party’s theories, would unjustifiably undermine the speed and thrift sought from arbitration proceedings.”511
In Leidos, Inc. v. Hellenic Republic,512 the district court confirmed a Greek arbitral award in favor of Leidos and against the Greek government for 39 million euros. The confirmation judgment stated the amount in euros. Thereafter, Leidos filed a motion under Federal Rule of Civil Procedure 59(e) to amend the judgment by converting the amount into
U.S. dollars. The court granted the motion and converted the amount into dollars. However, because the value of the euro had declined significantly since the time of the arbitral award, the conversion increased the amount by approximately $12 million. Following Greece’s appeal, the Court of Appeals reversed the conversion.
The court held that the district court committed two errors. The first was its assumption that Rule 59(e) did not apply to Leidos because it was not the “losing party.” That assumption was based on a misunderstanding of applicable precedent interpreting Rule 59(e). The Rule applied to both the losing and the prevailing party and prevented them from reopening matters that should have been raised prior to the entry of the judgment. The second error was the trial court’s conclusion that it was “manifestly unjust” to award Leidos a judgment in euros, even though Leidos had expressly sought relief in euros at least three times and had not asked for dollars until its post-judgment motion. The appellate court concluded by stating that, under Rule 59(e), a district court “may not convert a judgment to dollars if the movant contracted in euros, received its arbitral award in euros, requested euros in its complaint and filed three proposed orders seeking euros, before reversing course post-judgment.”513
Completed Dec. 31, 2018
Salem, OR. S.C.S.
1 Dean Emeritus & Alex L. Parks Distinguished Chair in Law, Willamette University College of Law; LL.B. (Priv. L.), LL.B. (Publ. L.), LL.M., S.J.D., Ph.D.h.c., LL.D.h.c.mult.
2 Dean Emeritus & Alex L. Parks Distinguished Chair in Law, Willamette University College of Law; LL.B. (Priv. L.), LL.B. (Publ. L.), LL.M., S.J.D., Ph.D.h.c., LL.D.h.c.mult.
2 This Survey does not reflect the views of the Association of American Law Schools or its Section on Conflict of Laws.
1 The previous thirty surveys are, in chronological order:
1987: P. John Kozyris, 36 AM. J. COMP. L. 547 (1988); (2) 1988: Symeon C. Symeonides, 37 AM. J. COMP. L. 457 (1989); (3) 1989: P. John Kozyris & Symeon C. Symeonides, 38 AM. J. COMP.601 (1990); (4) 1990: Larry Kramer, 39 AM. J. COMP. L. 465 (1991); (5) 1991: Michael E. Solimine,
40 AM. J. COMP. L. 951 (1992); (6) 1992: Patrick J. Borchers, 42 AM. J. COMP. L. 125 (1994); (7) 1993:
Symeon C. Symeonides, 42 AM. J. COMP. L. 599 (1994); (8) 1994: Symeon C. Symeonides, 43 AM. J. COMP.(1995); (9) 1995: Symeon C. Symeonides, 44 AM. J. COMP. L. 181 (1996); (10) 1996: Symeon C.
Symeonides, 45 AM. J. COMP. L. 447 (1997); (11) 1997: Symeon C. Symeonides, 46 AM. J. COMP. L 233
(1998); (12) 1998: Symeon C. Symeonides, 47 AM. J. COMP. L. 327 (1999); (13) 1999: Symeon C.
Symeonides, 48 AM. J. COMP. L. 143 (2000); (14) 2000: Symeon C. Symeonides, 49 AM. J. COMP. L. 1
(2001); (15) 2001: Symeon C. Symeonides, 50 AM. J. COMP. L. 1 (2002); (16) 2002: Symeon C.
Symeonides, 51 AM. J. COMP. L. 1 (2003); (17) 2003: Symeon C. Symeonides, 52 AM. J. COMP. L. 9 (2004);
(18) 2004: Symeon C. Symeonides, 52 AM. J. COMP. L. 919 (2004); (19) 2005: Symeon C. Symeonides, 53 AM. J. COMP. L. 559 (2005); (20) 2006: Symeon C. Symeonides, 54 AM. J. COMP. L. 697 (2006); (21) 2007: Symeon C. Symeonides, 56 AM. J. COMP. L. 243 (2008); (22) 2008: Symeon C. Symeonides, 57 AM.
COMP.269 (2009); (23) 2009: Symeon C. Symeonides, 58 AM. J. COMP. L. 227 (2010); (24) 2010: Symeon C.
Symeonides, 59 AM. J. COMP. L. 303 (2011); (25) 2011: Symeon C. Symeonides, 60 AM. J. COMP. L. 291
(2012); (26) 2012: Symeon C. Symeonides, 61 AM. J. COMP. L. 217 (2013); (27) 2013: Symeon C.
Symeonides, 62 AM. J. COMP. L. 223 (2014); (28) 2014: Symeon C. Symeonides, 63 AM. J. COMP. L. 299
(2015); (29) 2015: Symeon C. Symeonides, 64 AM. J. COMP.221 (2016); (30) 2016: Symeon C. Symeonides, 65 AM. J. COMP. L. 1 (2017); (31) 2017: Symeon C. Symeonides, 66 AM. J. COMP. L. 1 (2018).
3 Because a sizable portion of the readership consists of foreign scholars who may be less familiar with certain aspects of American law, this Survey attempts to provide background information and explanations that normally would be unnecessary for the core readership of American conflicts scholars.
4 This number includes all decisions of the federal district courts and specialized lower federal courts, as well as a very small number of state trial-court decisions posted on Westlaw. The Survey does not cover these cases. The total number also includes “vertical conflicts” between federal and state law.
5 The ATS provides that “[t]he district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” 28 U.S.C. § 1350.
6 542 U.S. 692 (2004), discussed in Symeonides, 2004 Survey, supra note 1, at 925-30, 935-38.
7 569 U.S. 108 (2013), discussed in Symeonides, 2013 Survey, supra note 1, at 281-85.
5 138 S.Ct. 1386 (U.S. 2018). For extensive discussion of this case, see William J. Aceves, Correcting an Evident Error: A Plea to Revise Jesner v. Arab Bank, PLC, 107 GEO. L.J. ONLINE 63 (2018); William S.
6 Dodge, Corporate Liability Under the US Alien Tort Statute: A Comment on Jesner v Arab Bank, BUSINESS & HUMAN RIGHTS J., 1, (doi:10.1017/bhj.2018.19) available at https://www.cambridge.org/core/journals/business-and- human-rights-journal/article/corporate-liability-under-the-us-alien-tort-statutea-comment-on-jesner-v- arab-bank/BBCA3593EE2E7C05A98E6C6294698B62; Ursula Tracy Doyle,
7 The Cost of Territoriality: Jus Cogens Claims Against Corporations, 50 CASE W. RES. J. INT’L L. 225 (2018); RebeccaHamilton, United States Supreme Court–Alien Tort Statute–Corporate Liability– International Human Rights Violations, 112 AM. J. INT’L L. 720 (2018); Note, Alien Tort Statute–Foreign Corporate Liability–Jesner v. Arab Bank, PLC ,132 HARV. L. REV. 397 (2018); Beth Van Schaack, The Inconsequential Choice-of-Law Question Posed by Jesner v. Arab Bank, 24 ILSA J. INT’L & COMP. L. 359 (2018). For discussion of related issues from this year’s literature, see Jacqueline L. Flanagan, Holding U.S. Corporations Accountable: Toward a Convergence of U.S. International Tax Policy and International Human Rights, 45 PEPP. L. REV. 685 (2018); Michael J. Kelly, Atrocities by Corporate Actors: A Historical Perspective, 50 CASE W. RES. J. INT’L L. 49 (2018); Thomas H. Lee, The Law of Nations and the Judicial Branch, 106 GEO. L.J. 1707 (2018); Michael D. Ramsey, The Constitution’s Text and Customary International Law, 106 GEO. L.J. 1747 (2018); Paul B. Stephan, Inferences of Judicial Lawmaking Power and the Law of Nations, 106 GEO. L.J. 1793 (2018); Milena Sterio, Corporate Liability for Human Rights Violations: The Future of the Alien Tort Claims Act, 50 CASE W. RES. J. INT’L L. 127 (2018); Comment (C. Connelly), The Alien Tort Statute: “An Avant-Garde Tool for Human Rights” or a Camouflaged Curse? 87 U. CIN. L. REV. 203 (2018); Note (S. Khakurel), The Circuit Split on Mens Rea for Aiding and Abetting Liability Under the Alien Tort Statute, 59 B.C. L. REV. 2953 (2018); Note (A. Pitts), Extraterritoriality and the Alien Tort Statute–Narrow Application Preserves Crucial Boundaries, 71 SMU L. REV. 607 (2018); Note (A. Yull), The Alien Tort Statute: A Way to Find Jurisdiction Over Today’s Pirates, U.S. Government Contractors, 47 PUB. CONT. L.J. 581 (2018).
8 Kiobel, 569 U.S. at 124–125.
9 See Brief for United States as Amicus Curiae 5 (“This Court should vacate the decision below, which rests on the mistaken premise that a federal common-law claim under the ATS may never be brought against a corporation”) (quoted in 138 S.Ct. at 1431).
10 Id. at 1412.
11 Sosa, 542 U.S. at 714.
12 Id. at 719.
13 Id. at 729. 15 Id. at 732.
14 Id. at 732 (text).
15 Id. at 732, n. 20 (emphasis added).
16 Jesner, 138 S.Ct. at 1431, Sotomayor, J., dissenting.
17 See id at. 1412, Gorsuch, J., concurring (“I would end ATS exceptionalism. We should refuse invitations to create new forms of legal liability. And we should not meddle in disputes between foreign citizens over international norms.”).
18 See id. at 1414 (“I do not think the original understanding of the ATS or our precedent permits federal courts to hear cases like this. At a minimum, both those considerations and simple common sense about the limits of the judicial function should lead federal courts to require a domestic defendant before agreeing to exercise any Sosa-generated discretion to entertain an ATS suit.”).
19 Dodge, supra note 5, at 3.
20 Jesner, 138 S.Ct. at 1419-20, Sotomayor, J., dissenting (emphasis added). For extensive discussion of this point, see William S. Dodge, Brief of International Law Scholars as Amici Curiae in Support of Petitioners, Jesner v. Arab Bank, PLC (June 27, 2017). Available at SSRN: https://ssrn.com/abstract=2994127 or http://dx.doi.org/10.2139/ssrn.2994127
21 Jesner, 138 S.Ct. at 1421 Sotomayor, J., dissenting. Moreover, as Justice Sotomayor pointed out, the ATS was enacted against a legal backdrop of corporate tort liability, and its text references “tort[s]” without qualification and limits the classes of plaintiffs but does not distinguish among classes of defendants.
22 Id.
23 Id. at 1405, Kennedy, J.
24 Id. at 1405.
25 Id. at 1406.
26 A fourth Justice mentioned corporate status more or less in passing when he said that, “unless corporate liability would actively decrease diplomatic disputes, we have no authority to act” (Jesner, 138 S.Ct. at 1411, Alito, J. concurring), but his concurrence was not based on this status.
27 Id. at 1410.
28 906 F.3d 1120 (9th Cir. 2018), discussed infra.
29 As a knowledgeable commentator observed, “Justices Alito and Gorsuch would [not] necessarily favour applying the ATS cause of action to US corporations in a future case” and Justice Kavanagh who replaced Justice Kennedy “has taken view that the ATS does not apply to claims against corporations “in a dissenting opinion he wrote for the
D.C. Circuit Court of Appeals. Dodge, supra note 5 at 5.
30 See, e.g., Citizens United v. Federal Election Comm’n, 558 U.S. 310 (2010) (freedom of speech); Burwell v. Hobby Lobby Stores, Inc., 134 S.Ct. 2751 (U.S. 2014) (religious belief).
31 Charity Ryerson, Supreme Court Rejects Liability for Foreign Corporations in International Human Rights Cases, available at https://legaldesign.org/calblog/2018/4/24/supreme-court-rejects-liability-for-foreign-corporations-in- international-human-rights-cases
32 906 F.3d 1120 (9th Cir. 2018).
33 Id. at 1124.
34 136 S.Ct. 2090 (U.S. 2016), discussed in Symeonides, 2016 Survey, supra note 1, at 5-7.
35 Doe, 906 F.3d at 1126.
36 896 F.3d 501 (D.C. Cir. 2018).
37 549 U.S. 422 (2007), discussed in Symeonides, 2007 Survey, supra note 1, at 308-09.
38 By contrast, the court held that the act-of-war exception to liability under the Anti-Terrorism Act presented a merits issue, not a jurisdictional one, and thus the trial court erred by dismissing the claim on this ground without first establishing personal jurisdiction.
39 878 F.3d 1268 (11th Cir. 2018).
40 Sosa v. Alvarez–Machain, 542 U.S. 692, 732 (2004) (quoting Filartiga v. Pena–Irala, 630 F.2d 876, 890 (2d Cir 1980) (alteration in original).
41 Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108, 127 (2013), Breyer, J., concurring: (“I would find jurisdiction under [the ATS] where . . . (2) the defendant is an American national, or (3) the defendant’s conduct substantially and adversely affects an important American national interest, and that includes a distinct interest in preventing the United States from becoming a safe harbor (free of civil as well as criminal liability) for a torturer or other common enemy of mankind.”).
42 See, e.g., Doe v. Drummond Co., Inc., 782 F.3d 576 (11th Cir. 2015), discussed in Symeonides, 2015 Survey, supra note 1, at 229-31; Baloco v. Drummond Co., 767 F.3d 1229 (11th Cir. 2014), discussed in Symeonides, 2014 Survey,
supra note 1, at 316-17.
43 Jara, 878 F.3d at 1274.
44 In the interest of completeness, it should be noted that the plaintiffs also sued the defendant under the Torture Victims Protection Act. They obtained a favorable verdict, which the defendant did not bother to appeal. He stopped participating in the litigation on the ATS claims.
45 See Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971). A Bivens action is available under certain circumstances to persons whose constitutional rights are violated by a federal officer. For discussion of the extraterritorial application of the Constitution from this year’s literature, see, e.g., David M. Golove & Daniel J. Hulsebosch, The Law of Nations and the Constitution: An Early Modern Perspective, 106 GEO. L.J. 1593 (2018); John Harrison, The Constitution and the Law of Nations, 106 GEO. L.J. 1659 (2018); George A. Rutherglen, The Rights of Aliens under the United States Constitution: At the Border and Beyond, 57 VA. J. INT’L L. 707 (2018).
46 885 F.3d 811 (5th Cir. 2018), cert. filed (NO. 17-1678), June 15, 2018.
47 899 F.3d 719 (9th Cir. 2018), cert. filed (NO. 18-309), Sept. 07, 2018.
48 See Symeonides, 2014 Survey, supra note 1, at 305-10; Symeonides, 2015 Survey, supra note 1, at 22526.
49 137 S.Ct. 1843 (U.S. 2017).
50 Id. at 1855, 1857.
51 Id. at 1854.
52 494 U.S. 259 (1990).
53 See Boumediene v. Bush, 553 U.S. 723 (2008), discussed in Symeonides, 2008 Survey, supra note 1, at 317-19.
54 Hernandez, 855 F.3d at 822 (quotation marks omitted, emphasis added).
55 Id. at 823.
56 Id. at 818.
57 Id. at 819 (brackets and quotation marks omitted).
58 Id. 819. For an extensive discussion of this case, see Note (Alexandra A. Botsaris), Hernandez v. Mesa: Preserving the Zone of Constitutional Uncertainty at the Border, 77 MD. L. REV. 832 (2018).
59 Id. at 825, Prado, J., dissenting.
60 Id.
61 Id. at 828.
62 Id. at 829, quoting Steven I. Vladeck, The New National Security Canon, 61 AM. U. L. REV. 1295, 1330 (2012).
63 899 F.3d 719 (9th Cir. 2018), cert. filed (NO. 18-309), Sept. 07, 2018.
64 Id. at 727. 67 Id. at 731.
65 Id.
66 Id.
67 Id.
68 Id. at 732.
69 Id. at 744, 745.
70 See, e.g., id. at 745-46 “[N]o one suggests that national security involves shooting people who are just walking down a street in Mexico It cannot harm national security to hold [defendant] civilly liable any more than it
would to hold him criminally liable, and the government is currently trying to do the latter. Thus, national security is not a special factor here.”).
71 Id. at 746.
72 Id. at 747, quoting Kiobel (brackets added].
73 Id. at 747-48. In Lanuza v. Love, 899 F.3d 1019 (9th Cir. 2018), the Ninth Circuit allowed a Bivens action against a
U.S. Immigration and Customs Enforcement (ICE) Counsel representing the government who intentionally forged and submitted an ostensible government document in an immigration proceeding, which had the effect of barring the plaintiff, a Mexican immigrant, from obtaining lawful permanent resident status to which he was otherwise entitled. The court recognized that, after Abbasi, “expanding the Bivens remedy is now a ‘disfavored’ judicial activity,” but concluded that “if the principles animating Bivens stand at all, they must provide a remedy on these narrow and egregious facts.” Id. at 1021.
74 18 U.S.C. § 2333(a).
75 897 F.3d 266 (D.C. Cir. 2018).
76 Pub. L. No. 114-222, § 2(a)(5), 130 Stat. 852, 852 (2016). For discussion of JASTA from this year’s literature, see Comment (T. Hammers), The Foreign Sovereign Immunities Act: Effects on the Victims and Families of 9/11, 25 WILLAMETTE J. INT’L L. & DISP. RESOL. 101 (2018); Note (R.E. Hancock), “MobLegislating”: JASTA’s Addition to the Terrorism Exception to Foreign Sovereign Immunity, 103 CORNELL L. REV. 1293 (2018); Note (L.A. Johnson), JASTA Say No: The Practical and Constitutional Deficiencies of the Justice Against Sponsors of Terrorism Act, 86 GEO. WASH. L. REV. 231 (2018); Note (D. Watkins), Justice Against Sponsors of Terrorism: Why Suing Terrorists May Not Be the Most Effective Way to Advance U.S. Foreign Policy Objectives, 106 KY. L.J. 145 (2017-18).
77 JASTA, § 2(b), 130 Stat. at 853.
78 JASTA § 7(2), 130 Stat. at 855.
79 18 U.S.C. § 1203.2.
80 893 F.3d 1294 (11th Cir. 2018).
81 This Clause grants Congress the power “[t]o define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations.” U.S. Const. Art. I, § 8, cl.10.
82 This Clause provides that “Congress shall have Power … [t]o make all Laws which shall be necessary and proper for carrying into Execution . . . all . . . Powers vested by this Constitution in the Government of the United States.”
U.S. Const., art I, § 8.
83 U.S. v. Noel, 893 F.3d at 1305.
84 15 U.S.C. § 78j(b). For discussion from this year’s literature, see Note (R.G. Toman), The Extraterritorial Reach of the U.S. Securities Laws and Non-Conventional Securities: Recent Developments after Morrison and Dodd- Frank, 14 N.Y.U. J.L. & BUS. 657 (2018).
85 561 U.S. 247 (2010), discussed in Symeonides, 2010 Survey, supra note 1, at 306-11.
86 Morrison, 561 U.S. at 267.
87 893 F.3d 73 (2d Cir. 2018).
88 677 F.3d 60 (2d Cir. 2012).
89 Giunta, 893 F.3d at 79.
90 896 F.3d 933 (9th Cir. 2018).
91 7 U.S.C. § 9(1),(3). For discussion from this year’s literature, see Note (G. Schwartz), “Deriving” an Understanding of the Extraterritorial Applicability of the Commodity Exchange Act, 91 ST. JOHN’S L. REV. 769 (2017).
92 Absolute Activist Value Master Fund Ltd. v. Ficeto, 677 F.3d 60, 67 (2d Cir. 2012).
93 890 F.3d 60 (2d Cir. 2018).
94 883 F.3d 904 (D.C. Cir. 2018).
95 See 17 U.S.C. § 101 et seq.
96 RJR Nabisco, Inc. v. European Community, 136 S.Ct. 2090 (U.S. 2016).
97 RJR Nabisco, 136 S.Ct. at 2101 (emphasis added).
98 Spanski, 863 F.3d at 914.
99 Id. (quotation marks, brackets and citations omitted).
100 509 U.S. 764 (1993).
101 Spanski, 863 F.3d at 915. For discussion of copyright conflicts from this year’s literature, see D. Liu, Public Art, Copyright, and Cross-Jurisdiction Enforcement, 40 EUR. INTEL. PROP. REV. 446 (2018); M. Rivoire, An Alternative to Choice of Law in (First) Ownership of Copyright Cases: the Substantive Law Method, 65 J. Copyright Soc’y
U.S.A. 203 (2018).
102 35 U.S.C. § 271(f)(2). For discussion from this year’s literature, see Sapna Kumar, Patent Damages Without Borders, 25 TEX. INTELL. PROP. L.J. 73 (2017).
103 138 S.Ct. 2129 (U.S. 2018).
104 35 U.S.C. § 284.
105 WesternGeco, 138 S.Ct. at 2136.
106 Id. at 2137.
107 See RJR Nabisco, 136 S.Ct. at 2016 (“[T]he presumption against extraterritoriality must be applied separately to both RICO’s substantive prohibitions and its private right of action.”).
108 WesternGeco, 138 S.Ct. at 2143-44, Gorsuch, J. dissenting. For a somewhat similar issue involving a trademark, see Commodores Entertainment Corp. v. McClary, 879 F.3d 1114 (11th Cir. 2018), cert. denied, 139 S.Ct. 225 (U.S. 2018) (holding that a worldwide injunction enjoining a U.S. citizen from infringing on a U.S. trademark held by a
U.S. corporation was no overbroad because a foreign infringement could cause confusion and other adverse effects in the United States).
109 890 F.3d 995 (Fed. Cir. 2018).
110 See 15 U.S.C. § 78dd-1 et seq. For discussion from this year’s literature, see Mike Koehler, Foreign Corrupt Practices Act Continuity in a Transition Year, 70 S.C. L. REV. 143 (2018); Jake E. Struebing, Federal Criminal Law and International Corruption: An Appraisal of the FIFA Prosecution, 21 NEW CRIM. L. REV. 1 (2018); Note (S. Routh), Tweet to Defeat Government Bribes: Limiting Extraterritorial Jurisdiction under the Foreign Corrupt Practices Act to Combat Global Corporate Corruption, 51 VAND. J. TRANSNAT’L L. 625 (2018).
111 902 F.3d 69 (2d Cir. 2018).
112 Id. at 76.
113 Id. at 96, citing United States v. Ali, 718 F.3d 929, 939 (D.C. Cir. 2013).
114 U.S. v. Hoskins, 902 F.3d at 96.
115 See 18 U.S.C. §§ 1961–1968. For general discussion of related issues from this year’s literature, see Julie Rose O’Sullivan, The Extraterritorial Application of Federal Criminal Statutes: Analytical Roadmap, Normative Conclusions, and a Plea to Congress for Direction, 106 GEO. L.J. 1021 (2018).
116 RJR Nabisco, Inc. v. European Community, 136 S.Ct. 2090, at 2106 (U.S. 2016).
117 See, e.g., id. at 2108 (“Nothing in § 1964(c) provides a clear indication that Congress intended to create a private right of action for injuries suffered outside of the United States.”); id. at 2111 (directing the dismissal of the remaining claims because they “rest entirely on injury suffered abroad”).
118 874 F.3d 806 (2d Cir. 2017), discussed in Symeonides, 2017 Survey, supra note 1, at 21-22.
119 885 F.3d 1090 (7th Cir. 2018).
120 Id. at 1095.
121 Id.
122 905 F.3d 694 (3rd Cir. 2018).
123 Id. at 707.
124 Id. at 709 (quotation marks omitted).
125 In addition to Hoskins, supra, and Vasquez, infra, see United States v. Sitzmann, 893 F.3d 811, 822 (D.C. Cir. 2018) (per curiam); United States v. Ubaldo, 859 F.3d 690, 700-01 (9th Cir. 2017), cert. denied, 138 S.Ct. 704 (U.S.
2018); United States v. Valenzuela, 849 F.3d 477, 484-85 & n.3 (1st Cir.), cert. denied, 138 S.Ct. 117 (U.S. 2017);
see also United States v. Gasperini, 729 Fed. App’x. 112, 113-14 (2d Cir. 2018). 129 899 F.3d 363 (5th Cir. 20180,
cert. filed (NO. 18-6672), Nov. 5, 2018.
126 See 46 U.S.C.A. § 70501 et seq. For discussion from this year’s literature, see Note (E. Aquila), Courts Have Gone Overboard in Applying the Maritime Drug Law Enforcement Act, 86 FORDHAM L. REV. 2965 (2018).
127 736 Fed. App’x. 812 (11th Cir. 2018).
128 U.S. CONST. ART. I, § 8, cl. 10 (empowering Congress “[t]o define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations.”) 133 891 F.3d 929 (11th Cir. 2018).
129 46 U.S.C.A. § 70502(e).
130 138 S.Ct. 816 (U.S. 2018), discussed in Note (Jennifer Atwood), Rubin v. Islamic Republic of Iran: The Supreme Court’s Textually Veiled Decision to Give State Terror Sponsors Immunity, 96 NEB. L. REV. 977 (2018); Note, U.S. Supreme Court Holds that a Provision of the Foreign Sovereign Immunities Act Does Not Lift Immunity from Attachment of Iranian Artifacts, 112 AM. J. INT’L L. 496(2018). See also Comment (H. Claxton), Indiana Jones and the Foreign Sovereign Immunities Act (FSIA): Interpreting FSIA’s State Sponsored Terror Exception, 66 U. KAN. L. REV. 181 (2017).
131 See 28 U.S.C.A. § 1604 et seq.
132 28 U.S.C.A. § 1610(g) (emphasis added).
133 See Ben–Haim v. Edri, 183 A.3d 252 (N.J. Super. A.D. 2018).
134 See Republic of Sudan v. Owens, 194 A.3d 38 (D.C. 2018); Sullivan v. Republic of Cuba, 891 F.3d 6 (1st Cir. 2018); Fraenkel v. Islamic Republic of Iran, 892 F.3d 348 (D.C. Cir. 2018).
135 See EIG Energy Fund XIV, L.P. v. Petroleo Brasileiro, S.A., 894 F.3d 339 (D.C. Cir. 2018), reh’g en banc denied (Oct. 1, 2018), cert. docketed (U.S., Dec. 4, 2018); Schubarth v. Federal Republic of Germany, 891 F.3d 392 (D.C. Cir. 2018), mandate stayed, 2018 WL 4871161 (D.C. Cir., Oct. 5, 2018); BAE Systems Technology Solution & Servs., Inc. v. Republic of Korea’s Defense Acquisition Prog. Adm., 884 F.3d 463 (4th Cir. 2018), cert. denied, 139 S.Ct. 209 (U.S. 2018); Baylay v. Etihad Airways P.J.S.C., 881 F.3d 1032 (7th Cir. 2018), reh’g denied (March 7, 2018), cert. denied, 139 S.Ct. 175 (U.S. 2018); Packsys, S.A. de C.V. v. Exportadora de Sal, S.A. de C.V., 899 F.3d 1081 (9th Cir. 2018); Devengoechea v. Bolivarian Republic of Venezuela, 889 F.3d 1213 (11th Cir. 2018).
136 See Philipp v. Federal Republic of Germany, 894 F.3d 406 (D.C. Cir. 2018), discussed infra II.I; Simon v. Republic of Hungary, F.3d , 2018 WL 6816327 (D.C. Cir. 2018); Helmerich & Payne International Drilling Co. v. Bolivarian Republic of Venezuela, Fed. App’x. , 2018 WL 3901246 (D.C. Cir. 2018); Petersen Energia Inversora S.A.U. v. Argentine Republic and YPF S.A., 895 F.3d 194 (2nd Cir. 2018), cert. filed (NO. 18-575), Oct. 31, 2018, and cert. filed (NO. 18-581), Oct. 31, 2018; Comparelli v. Republica Bolivariana De Venezuela, 891 F.3d
1311 (11th Cir. 2018); Asemani v. Islamic Republic of Iran, 2018 WL 2049693 (Md. App. 2018).
137 138 S.Ct. 1649 (2018).
138 For an annual review of developments in Native American law, see Grant Christensen, A View from American Courts: The Year in Indian Law 2017, 41 SEATTLE U. L. REV. 805 (2018). For other writings from this year’s literature, see Note (H. Malasky), Tribal Sovereign Immunity and the Need for Congressional Action, 59 B.C. L. REV. 2469; Note (M. Ginga), Patently Absurd: Critiquing the USPTO’s Disparate Treatment of Tribal and State Immunity in Inter Partes Review, 75 WASH. & LEE L. REV. 1703 (2018).
144 502 U.S. 251 (1992).
145 Upper Skagit, 138 S.Ct. at 1656, Thomas, J., dissenting (internal quotation marks omitted).
146 Id. at 1658.
147 138 S.Ct. 1865 (U.S. 2018).
139 Id. at 1869.
140 See In re Vitamin C Antitrust Litigation, 837 F.3d 175 (2d Cir. 2016), vacated by the decision discussed in the text; discussed in Symeonides, 2016 Survey, supra note 1, at 8-9. For a comprehensive, excellent discussion of the issues before the Supreme Court, see Louise Ellen Teitz, Must a United States Federal Court Defer to a Foreign Sovereign’s Interpretation of Its Law in a Suit in U.S. Federal Court, 45 PREVIEW U.S. SUP. CT. CAS. 221 (2018).
141 In addition to the case discussed in the text, see United States v. McNab, 331 F.3d 1228, 1239–1242 (11th Cir. 2003); McKesson HBOC, Inc. v. Islamic Republic of Iran, 271 F.3d 1101, 1108–1109 (D.C. Cir. 2001); In re Oil Spill by Amoco Cadiz, 954 F.2d 1279, 1311–1313 (7th Cir. 1992).
142 In re Vitamin C Antitrust Litigation, 584 F.Supp.2d 546, at 557 (E.D.N.Y. 2008).
143 Id. at 559.
144 In re Vitamin C Antitrust Litigation, 837 F.3d at 189.
145 Animal Science, 138 S.Ct. at 1872.
146 Id. at 1874. 156 Id. at
1873.
147 Id., quoting Advisory Committee’s 1966 Note on Fed. Rule Civ. Proc. 44.1, 28 U.S.C. App., p. 892 158 Id. at 1869, quoting Rule 44.1.
148 Id. at 1869-70, quoting Advisory Committee’s 1966 Note.
149 Id. at 1873 (internal quotation marks omitted).
150 902 F.3d 940 (9th Cir. 2018).
151 See infra II.G.
152 G and G Productions, 902 F.3d at 949 (the court’s emphasis).
153 Id. at 950 (quotation marks omitted).
154 Id.
155 Id. (court’s emphasis).
156 Id. at 949.
157 Id. (quotation marks omitted; court’s emphasis).
158 Id. at 950 (quotation marks omitted).
159 Id.
160 544 S.W.3d 467 (Tex. App. 2018), discussed infra at II.J.1.
161 Id. at 479.
162 Id. (internal quotation marks omitted).
163 Id.
164 Id. at 480.
165 238 Cal.Rptr.3d 545 (Cal. App. 2018), discussed infra at II.J.3.
166 The states that have adopted such amendments include: Alabama, Arizona, Arkansas, Florida, Idaho, Kansas Louisiana, Mississippi, North Carolina, Oklahoma, South Dakota, Tennessee, and Texas. See National Conference of State Legislatures, State Resources on the Prohibition of the Use of Foreign or Religious Law in State Courts http://www.ncsl.org/research/civil-and-criminal-justice/-state-resources-on-the-prohibition-of-the-use-of-foreign- law-in-state-courts.aspx. For discussion, see Louise Ellen Teitz, The Challenge of Accommodating Foreign Law in Domestic Courts, in FRANCO FERRARI & DIEGO
- FERNÁNDEZ ARROYO (eds.), THE CONTINUING RELEVANCE OF PRIVATE INTERNATIONAL LAW AND NEW CHALLENGES (forthcoming 2019).
167 ALA. CONST. ART. I, § 13.50(b)(6). Foreign law is defined as “any law . . . established, used, or applied in a jurisdiction outside of the states or territories of the United States, or which exist as a separate body of law . . . or used anywhere by any people, group, or culture different from the Constitution and laws of the United States or the State of Alabama.” Id. § 13.50(b)(5).
168 Id. § 13.50(c).
169 So.3d , 2018 WL 3197479 (Ala. 2018).
170 Id. at *3.
171 Id. at *6.
172 Id. at *4.
173 Id.
174 ALA. CONST. ART. I, § 13.50(b)(6).
175 Id. § 13.50(c).
176 See SYMEON C. SYMEONIDES, OXFORD COMMENTARIES ON AMERICAN LAW: CHOICE OF LAW, 400-06 (2016) [hereinafter SYMEONIDES, CHOICE OF LAW].
177 S.W.3d , 2018 WL 6314663 (Tex. App. 2018).
178 Id. at *2 (emphasis added).
179 Id. at *9.
180 The court held that the choice-of-law clause was enforceable because, in light of its numerous contacts, Texas had a more significant relationship and its law would have been applicable under § 188 of the Restatement even in the absence of the choice-of-law clause.
181 For comparative discussion, see Symeon C. Symeonides, The Scope and Limits of Party Autonomy in International Contracts: A Comparative Analysis, in FRANCO FERRARI & DIEGO P. FERNÁNDEZ ARROYO (eds.), THE CONTINUING RELEVANCE OF PRIVATE INTERNATIONAL LAW AND NEW CHALLENGES (forthcoming 2019).
182 31 N.Y.3d 372, 103 N.E.3d 774 (N.Y.2018).
183 See 2138747 Ontario, Inc. v. Samsung C & T Corp., 39 N.Y.S.3d 10 (N.Y.A.D. 2016), discussed in Symeonides, 2016 Survey, supra note 1, at 52. The court based its interpretation on the wording of the choice-of-law clause, which provided that the contract was to be governed by “and enforced” in accordance with New York law. The court could have reached the same conclusion by relying on the New York forum selection clause.
184 Ontario, Inc. 103 N.E.3d at 779.
185 45 N.E.3d 917 (N.Y. 2015), discussed in Symeonides, 2015 Survey, supra note 1, at 247-49.
186 982 N.E.2d 609 (N.Y. 2012), discussed in Symeonides, 2012 Survey, supra note 1, at 245-46.
187 Ontario, Inc., 103 N.E.3d at 779.
188 Id. at 776. 200 Id. at 779.
189 Indeed, the same result follows if the forum characterizes its borrowing statute as substantive. If, as in most cases, the clause chooses only the substantive law of the forum, the statute applies as part of that law. If, as in this case, the clause chooses both the substantive and the procedural law of the forum, the statute applies as part of the forum’s whole law.
190 428 P.3d 51 (Utah App. 2018).
191 428 P.3d 21 (Utah App. 2018).
192 428 P.3d 1 (Utah App. 2018).
193 2018 WL 674000 (Ten. App. 2018).
194 Id. at *3.
195 Id. at *4.
196 For a case involving the same pattern and decided in the same way, see NewSpin Sports, LLC v. Arrow Electronics, Inc., F.3d , 2018 WL 6295272 (7th Cir. 2018) (applying New York substantive law because of the contract’s choice-of-law clause and Illinois law because, “as to procedural matters, the law of the forum controls, and in Illinois, statutes of limitations are procedural, merely fixing the time in which the remedy for a wrong may be sought, and do not alter substantive rights.” Id. at *4 (quotation marks omitted)).
197 233 Cal.Rptr.3d 211 (Cal. App. 2018).
198 See infra at II.G.
199 See, e.g., Portfolio Recovery Assoc., LLC v. King, 927 N.E.2d 1059 (N.Y. 2010); Resurgence Fin., LLC v. Chambers, 92 Cal.Rptr.3d 844 (Cal. App. 2009); McCorriston v. L.W.T., Inc., 536 F.Supp.2d 1268 (M.D. Fla. 2008).
200 Lujan, 233 Cal.Rptr.3d at 218. In Panico v. Portfolio Recovery Associates, LLC, 879 F.3d 56 (3rd Cir. 2018) (decided under New Jersey conflicts law), which involved a New Jersey debtor but an otherwise identical scenario, the court reached the same result.
201 2018 WL 2540437 (La. App. 2018), writ denied, 253 So.3d 794 (La. 2018).
202 Under Louisiana law, a peremptive period is a time period fixed by law for the existence of the right. Unless timely exercised, the right is extinguished upon the expiration of the period, which cannot be renounced, interrupted or suspended. A peremptive period is similar in some respects to a limitation period, but one important difference is that a rule imposing a peremptive period is considered substantive rather than procedural.
203 The case involved accounting services rendered by the defendant, a New York accounting firm, to the plaintiff, a Louisiana company.
204 423 S.C. 432 (S.C. App. 2018).
205 Id. at 449-50.
206 102 N.E.3d 741 (Ill. App. 2018), appeal denied, 108 N.E.3d 849 (Ill. 2018).
207 Prospect Funding, 102 N.E.3d at 748, quoting a Minnesota case.
208 Id., quoting another Minnesota case.
209 See Restatement (Second) § 187, cmt. e. For discussion of the case law and necessary caveats, see SYMEONIDES, CHOICE OF LAW, 386-88.
210 914 N.W.2d 76 (Wisc. 2018).
211 416 P.3d 1061 (Ok. 2018).
212 741 Fed. App’x. 85 (3d Cir. 2018) (decided under New Jersey conflicts law).
213 2018 WL 4868289 (N.J. Super. A.D. 2018).
214 2018 WL 1635006 (Del. Super. Ct. 2018).
215 The only Delaware connection mentioned in the case is the plaintiff’s incorporation in Delaware. The case does not mention whether the contract contained a Delaware forum selection clause.
216 2018 WL 4140635 (Tex. App. 2018), reh’g denied (Oct. 25, 2018).
217 106 N.E.3d 556 (Mass. 2018).
218 For cases in which the contract contained inbound choice-of-law and forum selection clauses, namely cases in which the action is filed in the state designated in the forum selection clause, the failure to discuss the choice-of-law question is understandable. For such cases, see Quanta Computer Inc. v. Japan Communications Inc., 230 Cal.Rptr.3d 334, (Cal. App. 2018), discussed infra; Samaca, LLC v. Cellairis Franchise, Inc., 813 S.E.2d 416 (Ga. App. (2018); M.Z. v. Carnival Corporation, 239 So.3d 756 (Fla. App. 2018); Rieder v. Meeker, 2018 WL 5074703 (Tex. App. Oct. 18 2018); Ball Up, LLC v. Strategic Partners Corp., 2018 WL 3673044 (Tex. App., Aug. 2, 2018).
219 S.E.2d , 2018 WL 4940295 (Ga. App. 2018).
220 Id. at * *7 (quotation marks omitted).
230 See Symeonides, 2017 Survey, supra note 1, at 52-54; Symeon C. Symeonides, What Law Governs Forum Selection Clauses, 78 LA. L. REV. 1119 (2018).
was true, but more understandably so, in the numerous cases in which the forum se-
225lection clause was not accompanied by a choice-of-law clause.226
221 For a partial defense, see Symeon C. Symeonides, What Law Governs Forum Selection Clauses, 78 LA. L. REV. 1119, 1154-60 (2018).
222 907 F.3d 1240 (10th Cir. 2018).
223 In Drulias v. 1st Century Bancshares, Inc., Cal.Rptr.3d , 2018 WL 6735137 (Cal. App. 2018), a California shareholder of a Delaware corporation challenged the enforceability of a Delaware forumselection clause in the corporation’s bylaws. The parties and the court agreed that this issue involved the corporation’s internal affairs, which were governed by Delaware law. The court held that the forum selection clause was valid under both Delaware and California law.
224 For state court cases, see, e.g., Ex parte Terex USA, LLC, So.3d , 2018 WL 1548187 (Ala. 2018); Ex parte Killian Construction Co., So.3d , 2018 WL 5730138 (Ala. 2018); LV Car Service, LLC v. AWG Ambassador, LLC, 416 P.3d 206 (Nev. 2018); TBF Financial, LLC v. Compass Systems & Programming, Inc., 2018 WL 1531158 (N.H. 2018); Hermes Beteiligungsverwaltungs GmbH v. Siemens Shared Services, 2018 WL 3373070 (Cal. App. 2018); Patrick v. Allstate Insurance Co., 2018 IL App (1st) 17-
225 -U (Ill. App. 2018); inVentiv Health Communications, Inc. v. Rodden, 108 N.E.3d 605 (Ohio App. 2018); Huber
- Inpatient Medical Services, Inc., N.E.3d , 2018 WL 6132665 (Oh. App. 2018); Horie v. Law Offices of Art Dula, S.W.3d , 2018 WL 4427400 (Tex. App. 2018); In re EP Floors Corp., 2018 WL 4354688 (Tex. App. 2018); In re Rosewood Private Investments, Inc., 2018 WL 4403749 (Tex. App. 2018); Bundy v. Adesa Houston D/B/A Adesa Inc., 2018 WL 6053602 (Tex. App. 2018). For federal court cases, see, e.g., In re McGraw- Hill Global Education Holdings LLC, F.3d , 2018 WL 6072622 (3d Cir. 2018); Wall v. Corona Capital, LLC, Fed. App’x. , 2018 WL 6133390 (3d Cir. 2018); Al Copeland Investments, L.L.C. v. First Specialty Ins. Corp., 884 F.3d 540 (5th Cir. 2018); Yei A. Sun v. Advanced China Healthcare, Inc., 901 F.3d 1081 (9th Cir. 2018); Hisey v. Qualtek USA, LLC, Fed. App’x. , 2018 WL 4896744 (11th Cir. 2018).
226 For state court cases, see, e.g., Ex parte United Propane Gas, Inc., So.3d , 2018 WL 671828 (Ala. 2018); Trinity v. Apex Directional Drilling LLC, P.3d , 363 Or. 257 (Or. 2018); Dierenfield v. Wells Fargo Bank, N.A., 2018 WL 1417298 (Cal. All. 2018); Peterson v. Evapco, Inc., 188 A.3d 210 (Md. App. 2018); Optikal Noize, Inc. v. Global Gift Foundation, 2018 WL 1081952 (Cal. App. 2018); Degregorio v. Marriott Int’l, Inc., 2018 WL 3096627 (Del. Super. 2018): Baker v. Economic Research Services, Inc., 242 So.3d 450 (Fla. App. 2018). For federal court cases, see, e.g. Reading Health System v. Bear Stearns & Co., 900 F.3d 87 (3rd Cir. 2018); Mueller v. Apple Leisure Corp., 880 F.3d 890 (2018).
227 889 F.3d 127 (3d Cir. 2018).
228 515 U.S. 528 (1995). Sky Reefer held that a foreign arbitration clause would not lessen carrier liability in violation of COGSA solely because litigating abroad would be costlier.
229 Note to 46 U.S.C. § 30701, Title I, Section 8 (emphasis added).
230 Liberty Woods, 889 F.3d at 130.
231 230 Cal.Rptr.3d 334 (Cal. App. 2018).
232 For a collection of such statutes, see Symeonides, The Scope and Limits of Party Autonomy, supra note 192.
233 CAL. CODE CIV. PROC. § 4010.40.
234 Quanta Computer, 230 Cal.Rptr.3d, at 343 (quoting legislative history). To facilitate that effect, the Legislature added another provision prohibiting the application of forum non conveniens to actions filed under § 4010.40. However, that provision had a five-year sunset and it expired.
235 Id. at 339.
236 Id.
237 Id. at 342.
238 Id. at 343-44.
239 Id. at 344.
240 Id.
241 2018 WL 992193 (Cal. App. 2018).
242 For samples from this year’s literature on arbitration, see, e.g. Alan S. Rau, The Allocation of Power between Arbitral Tribunals and State Courts, 390 RECUEIL DES COURS 2017; George A. Bermann, The Role of National Courts at the Threshold of Arbitration, 28 AM. REV. INT’L ARB. 291-307 (2017); Yilin T. Chen, A Harmonizing Framework for Choice-of-Law Practices in U.S. Judicial Enforcement of Arbitration Agreements, 29 AM. REV. INT’L ARB. 81 (2018); Julian Ellis, A Comparative Law Approach: Enforceability of Arbitration Agreements in American Insolvency Proceedings, 92 AM. BANKR. L.J. 141 (2018); Ronán Feehily, Separability in International Commercial Arbitration: Confluence, Conflict and the Appropriate Limitations in the Development and Application of the Doctrine, 34 ARB. INT’L 355 (2018); Myron N.R. Phua, Resolving the Difficulties of Determining What Law Governs the Validity of an Arbitration Agreement— A Critique Contra Omnes, 28 AM. REV. INT’L ARB. 335 (2017); S.I. Strong, Anti-Suit Injunctions in Judicial and Arbitral Procedures in the United States, 66 AM. J. COMP. L. (SUP.) 153 (2018).
243 See also iPayment, Inc. v. Grainger, 808 S.E.2d 796 (N.C. App. 2018) (applying New York under a New York choice-of-law clause to interpret a New York arbitration clause).
244 2018 WL 618586 (Cal. App. 2018).
245 879 F.3d 1052 (9th Cir. 2018).
246 Id. at 1059.
247 Id. at 1057 (quoting Wilburn Boat Co. v. Fireman’s Fund Ins. Co., 348 U.S. 310, 313 (1955)).
248 Id. at 1059.
249 See id.
250 723 Fed. App’x. 415 (9th Cir. 2018), cert. denied, 138 S.Ct. 2680 (U.S. 2018).
251 136 S.Ct. 463 (2015), discussed in Symeonides, 2015 Survey, supra note 1, at 254-56.
252 See Five Star Senior Living Inc. v. Mandviwala, 138 S.Ct. 2680 (U.S. 2018).
253 425 P.3d 455 (Or. App. 2018).
254 Id. at 461 (emphasis in original). It is unclear why the court emphasized the word “state.” 267 Id.
255 Id.
256 Id.
257 506 P.2d 494 (Or. 1973).
258 2018 WL 5310168 (Ten. App. 2018).
259 Id. at *15.
260 99 N.E.3d 181 (Ill. App. 2018).
261 97 N.E.3d 574 (Ill. App. 2018).
262 IND. CODE ANN. § 34–30–11–1.
263 Hand, 99 N.E.3d at 181.
264 Id. at 186.
265 Id. at 188.
266 The Act provided that “[i]f a dog or other animal, without provocation, . . . injures any person who is peaceably conducting himself or herself in any place where he or she may lawfully be, the owner of such dog or other animal is liable in civil damages to such person for the full amount of the injury proximately caused thereby.” 510 ILCS 5/16.
267 See MO. ANN. STAT. § 273.036.
268 MO. ANN. STAT. § 537.325(2).
269 Perkinson, 97 N.E. at 585.
270 See Symeon C. Symeonides, The Third Conflicts Restatement’s First Draft on Tort Conflicts, 92 TUL. L. REV. 1 (2017).
271 254 So.3d 57 (Miss. 2018).
272 Id. at 64.
273 Id. at 68, 69.
274 Id. at 66 (internal quotation marks omitted). Mississippi criminal law defined the term “human being” as “an unborn child at every stage of gestation from conception until live birth and the term ‘unborn child’ means a member of the species homo sapiens, at any stage of development, who is carried in the womb.” Id. at 67.
275 Id. at 66.
276 Id. at 68.
277 See id.
278 Id.
279 Id. at 69.
280 Id. at 69, n. 10.
281 Id. at 73, Ishee, J., dissenting (quotation marks and emphasis omitted).
282 Id.
283 Id. at 74, quoting Loucks v. Standard Oil Co. New York, 224 N.Y. 99, 111, 120 N.E. 198 (N.Y. 1918).
284 179 A.3d 9 (Pa. 2018).
285 73 P.S. § 201–3.
286 Danganan, 179 A.3d at 14.
287 Id. at 15.
288 Id. at 11-12.
289 Id. at 16.
290 Id. at 17. Following the certified answer, the Third Circuit held that the fact that plaintiff was nonresident of Pennsylvania did not bar him from asserting claim under UTPCPL and remanded the case to the district court. See Danganan v. Guardian Protection Servs. Fed. App’x. _ , 2018 WL 3737951 (3rd Cir. 2018).
291 S.W.3d , 2018 WL 6684346 (Tex. App. 2018).
292 Id. at *21 (internal quotation marks omitted).
293 217 S.W.3d 430 (Tex. 2007), discussed in Symeonides, 2007 Survey, supra note 1, at 281-82. The court relied on additional Texas and federal cases.
294 The Daccach court reasoned that (1) the purposes of the TSA were “to indemnify investors victimized by violations of the [TSA], encourage compliance with the [TSA]’s regulatory and disclosure provisions, and create incentives for its private enforcement”; and (2) “achieving the [ ] [TSA’s] purposes w[ould] ultimately require that the [TSA] apply to situations that involve some out-of-state activities.” Daccach,
217 S.W.3d at 446.
308 Kubbernus & Balaton, S.W.3d at , 2018 WL 6684346 at *22.
309 Fed. App’x. , 2018 WL 3423562 (9th Cir. 2018).
310 See Thornell v. Seattle Serv. Bureau, Inc., 363 P.3d 587 (Wash. 2015) (en banc), discussed in Symeonides,
2015 Survey, supra note 1, at 277.
311 Thornell, Fed. App’x. , 2018 WL 3423562 at *2.
312 Id.
313 See id. at *3 (“There can be little doubt that if [plaintiff] had sought to apply a hypothetically more favorable Texas consumer protection statute to her claims, the conflicts analysis would heavily favor Texas. No different result should obtain simply because she favors Washington law.”).
314 Id. at *4, Berzon, J., dissenting.
295 See id. at *5.
296 906 F.3d 403 (6th Cir. 2018), reh’g en banc denied (Nov. 19, 2018) (decided under Ohio conflicts law).
297 Id. at 407-08.
298 Id. at 408.
299 912 N.W.2d 136 (Iowa 2018).
300 728 Fed. App’x. 279 (5th Cir. 2018) (decided under Mississippi conflicts law).
301 Id. at 284.
302 Fed. App’x. , 2018 WL 3636852 (11th Cir. 2018) (decided under Florida conflicts law).
303 194 A.3d 503 (N.J. 2018).
304 The intermediate court affirmed the grant of summary judgment in favor of the defendant in the cases in which the injuries occurred in California, Colorado, Indiana, Maryland, Mississippi, New York, Texas, and Virginia, and reversed the grant of summary judgment in cases in which the injuries occurred in the remaining 37 jurisdictions.
305 In re Accutane, 194 A.3d at 521.
306 Id. at 523.
307 Id.
308 Id.
309 Id. at 524.
310 Id.
311 153 A.3d 207 (N.J. 2017), discussed in Symeonides, 2017 Survey, supra note 1, at 64-66.
312 917 A.2d 767 (N.J. 2007), discussed in Symeonides, 2007 Survey, supra note 1, at 273-75.
313 In re Accutane, 194 A.3d at 523.
314 179 A.3d 45 (Pa. Super. 2018).
315 180 A.3d 1235 (Pa. Super. 2018), reargument denied (April 18, 2018).
316 Id. at 1254-55.
317 Id. at 1255.
318 419 P.3d 392 (Or. 2018).
319 See OR. REV. STAT. 30.905(1)
320 OR. REV. STAT. 30.905(2). This provision is not part of Oregon’s statute for tort conflicts, which was drafted by the undersigned.
321 Miller, 419 P.3d at 399.
322 In addition to the cases discussed in this section, see supra II.D.b.
323 189 A.3d 914 (N.J. Super. A.D. 2018).
324 The other states are Arizona, Florida, Idaho, Iowa, Massachusetts, Ohio, and West Virginia. For documentation, see SYMEONIDES, CHOICE OF LAW, 539-44.
325 Restatement (Second), § 142(2)(a).
326 MTK Food Services, 189 A.3d at 918.
327 Id. at 919. For another New Jersey case arising from a legal malpractice and involving the same pattern and reaching the same result (dismissing the action under California’s statute of limitation) see Wiebel v. Morris, Downing & Sherred, LLP, 2018 WL 6369453 (N.J. Super. App. Div. 2018).
328 2018 WL 1465459, (Cal. App. 2018).
329 The other states that follow the same approach are Arkansas, Delaware, Indiana, Michigan, Rhode Island, and Wisconsin. For documentation, see SYMEONIDES, CHOICE OF LAW, 535-39.
330 Sallah, 2018 WL 1465459 at *7.
331 Id. (court’s emphasis).
332 Id. (quotation marks omitted).
333 Id. (quotation marks omitted).
334 2018 WL 4212883 (Tex. App. 2018).
335 For a list and documentation, see SYMEONIDES, CHOICE OF LAW, 525-31.
336 Brandon, 2018 WL 4212883 at *2 (quotation marks omitted).
337 Id. 358 Id.
338 911 N.W.2d 374 (Wis. App. 2018), rev. granted, 383 Wis.2d 627 (2018).
339 Wis. Stat. § 893.07.
340 Paynter, 911 N.W.2d at 382-83.
341 Id. at 384 (quotation marks omitted).
342 Walker v. Nationwide Mut. Ins. Co., 2018 WL 2113629 (Ohio App. 2018), appeal not allowed, 153 Ohio St.3d 1475 (Ohio 2018), was a wrongful termination action filed in Ohio by a Tennessee employee of an Ohio employer. The Ohio borrowing statute mandated the application of the shorter statute of limitation of the state in which the cause of action “accrued.” The court held that under Ohio’s presumptive lex loci delicti rule the action accrued in Tennessee where the injury occurred and thus was barred by Tennessee’s statute of limitation, which provided for a shorter period than the Ohio statute.
343 420 P.3d 559 (Table), 2018 WL 3025981 (Nev. 2018).
344 Bradley, 2018 WL 3025981 at *1 (citing Canadian N. Ry. Co. v. Eggen, 252 U.S. 553, 558, 560–61, 563 (1920)).
345 902 F.3d 940 (9th Cir. 2018).
346 Id. at 942.
347 Gori’s best-known films include Life is Beautiful (1997) and Il Postino (1994).
348 After Basquiat’s death, his paintings vastly appreciated. For example, in 2017, another of Basquiat’s paintings set a record for any work by a U.S. artist sold at auction, fetching $110.5M at Sotheby’s.
349 See supra at II.A.
350 The Ninth Circuit remanded the case to the district court to determine whether the plaintiff’s replevin and unjust enrichment actions were also time-barred.
351 188 A.3d 297 (N.J. 2018).
352 See Gilbert Spruance Co. v. Pennsylvania Manufacturers’ Ass’n Ins. Co., 629 A.2d 885 (N.J. 1993); Pfizer, Inc. v. Employers Insurance, 712 A.2d 634 (N.J. 1998); HM Holdings, Inc. v. Aetna Cas. & Sur. Co., 712 A.2d 645 (N.J. 1998) (discussed in Symeonides, 1998 Survey, supra note 1, at 362-71).
353 Section 193 is the Restatement’s specific article for contracts of fire, surety or casualty insurance. It provides that those contracts are governed by “the local law of the state which the parties understood was to be the principal location of the insured risk during the term of the policy, unless with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 to the transaction and the parties, in which event the local law of the other state will be applied.”
354 Continental Ins. Co., 188 A.3d at 318..
355 Id.
356 Id. at 319.
357 Id.
358 Id.
359 191 A.3d 288 (Table) (Del. 2018).
360 See Certain Underwriters at Lloyds, London v. Chemtura Corp., 160 A.3d 457 (Del. 2017).
361 Travelers Ind. Co. 191 A.3d, at *4.
362 Id. at *6.
363 Id.
364 Id.
365 Id.
366 2018 WL 2093596 Pa. Super. 2018).
367 Id. at *3 n.4.
368 Id.
369 Id. at*5.
370 Id. at *4.
371 Id.
372 See Nationwide Mut. Ins. Co. v Walter, 434 A.2d 164 (Pa. Super. 1981).
373 See, e.g., Shelton v. Allstate Northbrook Ins. Co., 2018 IL App (2d) 170548-U, 2018 WL 4212867 (Ill. App. 2018) (California insurance policy, Colorado accident); Henry v. Travelers Personal Security Ins. Co., 2018 WL 678282 (Ky. App. 2018) (Tennessee policy, Kentucky accident); Williams v. Liberty Mut. Fire Ins. Co., So.3d , 2018 WL 6061017 (Miss. App. 2018) (Tennessee policy, Mississippi accident); Forsman v. Burgess, 552 S.W.3d 667 (Mo. App. 2018), reh’g and/or transfer denied (May 29, 2018), transfer denied (Aug. 21, 2018) (Kansas policy, Missouri accident); Thaxton v. Allstate Ins. Co., 2018 WL 3005930 (Ky. App. 2018) (Ohio policy, Kentucky accident).
374 For discussion of cases involving Nazi-looted art from this year’s literature, see Alyssa R. Bickford, Nazi-Looted Art: Preserving a Legacy, 49 CASE W. RES. J. INT’L L. 115 (2017); Herbert I. Lazerow, Holocaust Art Disputes: The Holocaust Expropriated Art Recovery Act of 2016, 51 INT’L LAW. 195 (2018); Note (J. Barnes), Holocaust Expropriated Art Recovery (HEAR) Act of 2016: A Federal Reform to State Statutes of Limitations for Art Restitution Claims, 56 COLUM. J. TRANSNAT’L L. 593 (2018); Note (K. Dye), Recent Development. Cassirer v. Thyssen- Bornemisza Collection Foundation: Nazi Art Crimes Are Still Relevant on the Twenty-First Century, 26 TUL. J. INT’L & COMP. L. 445 (2018).
375 894 F.3d 406 (D.C. Cir. 2018).
376 28 U.S.C. § 1605(3).
377 812 F.3d 127 (D.C. Cir. 2016). For a continuation of that case, see Simon v. Republic of Hungary, F.3d
, 2018 WL 6816327 (D.C. Cir. 2018).
378 Simon, 812 F.3d at 142. For related discussion from this year’s literature, see Note (F.N. Djoukeng), Genocidal Takings and the FSIA: Jurisdictional Limitations, 106 GEO. L.J. 1883 (2018).
379 In Simon v. Republic of Hungary, F.3d , 2018 WL 6816327 (D.C. Cir. 2018), which was decided on December 28, 2018, the D.C. Circuit reiterated this position and reversed the trial court’s contrary decision.
380 539 U.S. 396 (2003), discussed in Symeonides, 2003 Survey, supra note 1, at 12-15.
381 Philip, 812 F.3d at 418.
382 897 F.3d 1141 (9th Cir. 2018). This is the third time this case reached the Ninth Circuit. The previous two cases were von Saher v. Norton Simon Museum of Art at Pasadena, 578 F.3d 1016 (9th Cir. 2009), as amended in 592 F.3d 954 (9th Cir. 2010), cert. denied, 131 S. Ct. 3055 (U.S. 2011) (discussed in Symeonides, 2009 Survey, supra note 1, at 292-93); and von Saher v. Norton Simon Museum of Art at Pasadena, 754 F.3d 712 (9th Cir. 2014).
383 W.S. Kirkpatrick Co. v. Environ. Tectonics Corp., Int’l, 493 U.S. 400, 405, 409 (1990).
384 Provincial Gov’t of Marinduque v. Placer Dome, Inc., 582 F.3d 1083, 1089 (9th Cir. 2009).
385 Von Saher, 897 F.3d at 1149 (quotation marks omitted).
386 Id. at 1155.
387 Id. at 1156. For another Ninth Circuit decision holding that the act of state doctrine barred adjudication of claims involving a foreign sovereign, see Breeze Salt, Inc. v. Mitsubishi Corp., 899 F.3d 1064 (9th Cir. 2018) (holding that the doctrine barred adjudication of antitrust claims by American and foreign salt distributors against a salt production corporation that was 51% owned by the Mexican government).
388 ARK. STAT. § 9-11-107(a).
389 539 S.W.3d 638 (Ark. App. 2018).
390 So.3d , 2018 WL 5306884 (Ala. 2018).
391 544 S.W.3d 467 (Tex. App. 2018).
392 See supra at II.A.
393 Adeleye, 544 S.W.3d at 476.
394 Id.
395 Id.
396 181 A.3d 518 (Vt. 2018).
397 The husband possessed an employer-sponsored H-1 visa, which allowed him to lawfully work, and had completed two of the three steps to gain a permanent resident visa (Green card).
398 Maghu, 181 A.3d at 528.
399 Id.
400 Id. at 521.
401 Id. at 529-30.
402 Id. at 528 n.7.
403 243 So.3d 466 (Fla. App. 2018).
404 Id. at 467.
405 Id.
406 Id.
407 Id.
408 P.3d , 2018 WL 6062331 (Mt. 2018).
409 2018 WL 5310168 (Ten. App. 2018).
410 See supra .
411 N.E.3d , 94 Mass. App. Ct. 123 (Mass. App. 2018).
412 Id. at *3 (internal quotation marks omitted).
413 238 Cal.Rptr.3d 545 (Cal. App. 2018).
414 Id. at 550.
415 Id. at 548, quoting article 860 of the Japanese Civil Code of 1896.
416 Id.
417 Id., quoting SCHMIDT, HISTORY OF LAW IN JAPAN SINCE 1868, at 276 (Röhl edit., 2005).
418 Id. at 550.
419 Id. at 549 (internal quotation marks omitted).
420 Id. at 547, quoting CAL. PROB. CODE § 6451(a).
421 See supra .
422 S.W.3d , 2018 WL 3543022 (Tex. App. 2018), reconsideration en banc denied, S.W.3d , 2018 WL 6696769 (Tex. App. 2018).
423 See 51 FED. REG. 10,494, 10,494 (Mar. 26, 1986). The Convention is implemented by the International Child Abduction Remedies Act (“ICARA”). See 22 U.S.C. §§ 9003–9011.
424 Hague Convention, Art. 13(b)
425 The court rejected the mother’s request to participate through Skype, reasoning that there was no impediment to her in-person appearance other than her fear of arrest for violating the court’s earlier custody order.
426 Guimaraes, S.W.3d , 2018 WL 3543022 at *9 (internal quotation marks omitted).
427 Article 12 of the Hague Convention provides:
Where a child has been wrongfully removed . . . and . . . a period of less than one year has elapsed from the date of the wrongful removal . . . , the authority concerned shall order the return of the child forthwith. The judicial or administrative authority, even where the proceedings have been commenced after the expiration of the period of one year referred to in the preceding paragraph, shall also order the return of the child, unless it is demonstrated that the child is now settled in its new environment.
(emphasis added).
428 Guimaraes, S.W.3d , 2018 WL 3543022 at *12.
429 Id. at *13.
430 909 F.3d 353 (11th Cir. 2018).
431 F.3d , 2018 WL 6424956 (3rd Cir. 2018).
432 This is the third case involving a double abduction. In both of the previous cases, the court ordered the return of the child. See Pliego v. Hayes, 843 F.3d 226 (6th Cir. 2016); Mendez-Lynch v. Pizzutello, 2008 WL 416934 (N.D. Ga. 2008).
433 See supra, note .
434 Hague Convention, Art. 18.
435 See, e.g., Yaman v. Yaman, 730 F.3d 1 (1st Cir. 2013); Blondin v. Dubois, 238 F.3d 153 (2d Cir. 2001); Feder v.
Evans-Feder, 63 F.3d 217 (3d Cir. 1995); Alcala v. Hernandez, 826 F.3d 161 (4th Cir. 2016); March v. Levine, 249
F.3d 462 (6th Cir. 2001); Garcia v. Pinelo, 808 F.3d 1158 (7th Cir. 2015); Custodio v. Samillan, 842 F.3d 1084 (8th
Cir. 2016); In re B. Del C.S.B., 559 F.3d 999 (9th Cir. 2009); de Silva v. Pitts, 481 F.3d 1279 (10th Cir. 2007).
436 Fernandez, 909 F.3d at 363, quoting Hague Convention, Art. 1.
437 Id. at 363.
438 Id. at 364.
439 Id. at 365.
440 Id. at 365-66.
441 22 U.S.C. § 9003(b).
442 See Lozano v. Montoya Alvarez, 572 U.S. 1 (2014).
443 22 U.S.C. § 9003(e)(2) (emphasis added).
444 Space limitations do not allow discussion of more cases involving the Hague Convention. Readers interested in this subject may want to review the following appellate cases: Taglieri v. Monasky, 907
F.3d 404 (6th Cir. 2018); Rath v. Marcoski, 898 F.3d 1306 (11th Cir. 2018); Calixto v. Lesmes, F.3d , 2018 WL 6257410 (11th Cir. 2018); Ben–Haim v. Edri, 183 A.3d 252, (N.J. A.D. 2018); Matter of Marriage of Long and Borrello, 421 P.3d 989 (Wash. App 2018); Burnett v. Parra, 2018 WL 817783 (Min. App. 2018); In Interest of E.S.E., 2018 WL 3040326 (Tex. App. 2018). For general discussion from this year’s literature, see Charlotte Mol & Thalia Kruger, International Child Abduction and the Best Interests of the Child: An Analysis of Judicial Reasoning in Two Jurisdictions, 14 J. PRIV. INT’L L. 421 (2018).
466 160 A.D.3d 93, 73 N.Y.S.3d 1 (N.Y. A.D. 2018).
467 986 N.Y.S.2d 454 (N.Y. A.D. 2014), discussed in Symeonides, 2014 Survey, supra note 1, at 378-79.
468 AlbaniaBEG, 160 A.D.3d at 107.
469 See Linda J. Silberman & Aaron D. Simowitz, Recognition and Enforcement of Foreign Judgments and Awards: What Hath Daimler Wrought?, 91 N.Y.U. L. REV. 344 (2016).
470 The reference is to Uniform Foreign Money Judgments Recognition Act of 1962, which is in force in 15 states. New York did not adopt the Foreign-Country Money Judgments Recognition Act of 2005, which in force in 24 states. See https://www.uniformlaws.org/committees/community-home?CommunityKey=ae280c30- 094a-4d8f-b722-8dcd614a8f3e
445 See Daimler AG v. Bauman, 571 U.S. 117 (2014), discussed in Symeonides, 2014 Survey, supra note 1, at 303-05. Daimler held that a court has general jurisdiction to entertain a cause of action only if the defendants’ affiliations with the forum are “so continuous and systematic as to render [the defendants] essentially at home [there.]” 571 U.S. at 127.
446 AlbaniaBEG, 160 A.D.3d at 102 (emphasis added).
447 See Shaffer v. Heitner, 433 U.S. 186 (1977),
448 The exact statement was that “New York has traditionally been a generous forum in which to enforce judgments for money damages rendered by foreign courts.” Abu Dhabi Commercial Bank PJSC v. Saad Trading, Contracting and Financial Services Co, 986 N.Y.S.2d 454, at 457 (N.Y. App. Div. 2014) (quotation marks omitted).
449 Id. (quotation marks omitted).
450 AlbaniaBEG, 160 A.D.3d at 106 477 Id. at 110, n.19.
451 Id.
452 Id. at 107 (internal quotation marks omitted).
453 Id. at 108.
454 Id. quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
455 166 A.D.3d 494 (N.Y. A.D. 2018).
456 Id. at *1. For a lower court judgment to the same effect, see Diaz v. Galopy Corporation International, N.V., 61 Misc.3d 429, 79 N.Y.S.3d 494 (N.Y. Sup. 2018) (holding that “[o]nly when a judgment debtor opposing recognition
. . . asserts substantive statutory grounds for denying recognition, must there be either in personam or in rem jurisdiction in New York” and that when, as in this case, the debtor did not raise any such grounds “personal jurisdiction over a defendant is not required.”). Id. at 434, 498.
457 Harvardsky Prumyslovy, 166 A.D.3d at *1.
458 Id. (emphasis added).
459 Id., quoting New York’s version of the Uniform Act (emphasis added).
460 Uniform Act of 2005, § 4(c)(8) (emphasis added).
461 See Symeonides, 2014 Survey, supra note 1, at 377. For discussion from this year’s literature, see Hayk Kupelyants, Recognition and Enforcement of Foreign Judgments in the Absence of the Debtor and His Assets within the Jurisdiction: Reversing the Burden of Proof, 14 J. PRIV. INT’L L. 455 (2018).
462 260 S.W.3d 476, 479 (Tex. App. 2008), reh’g overruled (Jul. 3, 2008), review denied (Nov. 21, 2008), reh’g of petition for review denied (Jan. 9, 2009).
463 Id. at 479 (emphasis in original). See also Beluga Chartering B.V. v. Timber S.A., 294 S.W.3d 300 (Tex. App. 2009); Cantu v. Howard S. Grossman, P.A., 251 S.W.3d 731 (Tex. App. 2008).
464 S.W.3d , 2018 WL 5074596 (Tex. App. 2018).
465 Id. at *4.
466 2018 WL 258972 (Cal. App. 2018 2018).
467 CAL. CODE CIV. PROC. § 1721.
468 Attorney General of Canada v. Malone, 2018 WL 258972 at *3.
469 Id. at 4.
470 See W.M. v. V.A., Cal.Rptr.3d , 2018 WL 6566689 (Cal. App. 2018).
471 See AO Alfa-Bank v. Yakovlev, 230 Cal.Rptr.3d 214 (Cal. App. 2018).
472 See Mariles v. Hector, 2018 WL 3723104 (Tex. App. 2018), reh’g denied (Oct. 18, 2018).
473 See Griffith v. Gonzales–Alpizar, 421 P.3d 282 (Nev. 2018)
474 427 P.3d 143 (N.M. App. 2018), cert. denied (Sept. 20, 2018).
475 N.M.S.A. 1978 § 37-1-2 (1983). In the end, the court decided that the “date of the judgment” “must be construed to be 1999, not 1989.” Schmierer, 427 P.3d at 152.
476 Schmierer, 427 P.3d at 149.
477 38 U.S. 312 (1839).
478 337 U.S. 38 (1949).
479 385 U.S. 188 (1966).
480 Schmierer, 427 P.3d at 152.
481 Id.
482 419 P.3d 217 (Ok. 2018).
483 The creditor had previously fled an enforcement action in Oklahoma before the expiration of the five-year period but then abandoned that action.
484 385 U.S. 188 (1966).
485 Taracorp, 419 P.3d at 223. In Automotive Credit Corporation v. White, 810 S.E.2d 166 (Ga. App. 2018), a Michigan judgment creditor sought its enforcement in Georgia two year after the expiration of Georgia’s seven-year statute of limitation. The court held the judgment enforceable because another provision of the same statute allowed renewal of judgments within three years from the end of the seven-year period, thus effectively prolonging the life span of judgments to ten years.
486 So.3d , 2018 WL 6061211 (Miss. App. 2018).
487 Id. at *3.
488 96 N.E.3d 87 (Ind. App. 2018).
489 For some of our foreign readers, a “cognovit is the ancient legal device by which the debtor consents in advance to the holder’s obtaining a judgment without notice or hearing, and possibly even with the appearance, on the debtor’s behalf, of an attorney designated by the holder.” D. H. Overmyer Co. Inc., of Ohio v. Frick Co., 405 U.S. 174, 176 (1972).
490 EBF Partners, 96 N.E.3d at 92, quoting IND. CODE § 34–54–4–1.
491 Id. (internal quotation marks omitted).
492 522 U.S. 222 (1998).
493 Id. at 233.
494 In EBF Partners, LLC v. Evolving Solutions Inc., 95 N.E.3d 145 (Ind. App. 2018), which involved the same creditor and identical facts, the court reached the same result. A concurring judge wrote separately “to reemphasize that cognovit notes are [still] prohibited in Indiana” and that the New York court should have honored the prohibition contained in the cognovit note. Id. at 129, Pyle, J., concurring. For a repeat of the same scenario, see Funding Metrics LLC v. Owens, 2018 WL 6252436 (Az. App. 2018) (enforcing a New York judgment based on a cognovit note, even though the note itself would not have been valid under the law of Arizona, the enforcing state).
495 413 P.3d 1199 (Alaska 2018).
496 ALASKA STATS. § 34.40.110(k).
497 233 U.S. 354 (1914).
498 Id. at 360.
499 Also, as in Tennessee Coal, the causes of action over which Alaska claimed exclusive jurisdiction were “transitory” rather than “local.” 527 547 U.S. 293 (2006).
500 85 N.Y.S.3d 6 (N.Y.A.D. 2018).
501 See Wilko v. Swan, 346 U.S. 427, 436–437 (1953).
502 Id. at *9, quoting Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, 473 U.S. 614, 631 (1985).
503 Id. at *17 (internal quotation marks omitted). The court also quoted statements to the effect that “The potential for
. . . mistakes [by the arbitrators] is the price for agreeing to arbitration” and, “however disappointing [an award] may be,” parties that have bargained for arbitration “must abide by it” and “[e]rrors, mistakes, departures from strict legal rules, are all included in the arbitration risk.” Id. at 9 (citations and quotation marks omitted).
504 Id. (internal quotation marks omitted).
505 Id. at *19.
506 Id. at *17 (internal quotation marks omitted).
507 Id. at *19 (internal quotation marks omitted).
508 894 F.3d 327 (D.C. 2018).
509 Id. at 335.
510 Id. at 337.
511 Id. at 338 (internal quotation marks omitted).
512 881 F.3d 213 (D.C. Cir. 2018).
513 Id. at 220. For a sample from this year’s literature on arbitral awards, see, e.g., Michael J. Donaldson, The Lesser Evil: How and Why Litigation over Arbitration Awards Should Have Preclusive Effects, 28 AM.
REV. INT’L ARB. 309 (2017); Jonathan Hill, Claims that an Arbitral Tribunal Failed to Deal with an Issue: The Setting aside of Awards under the Arbitration Act 1996 and the UNCITRAL Model Law on International Commercial Arbitration, 34 ARB. INT’L 385 (2018); Yasmine Lahlou, How Courts Treat Foreign Award Judgments: The Unsettled State of US Law and an English Perspective, 12 DISP. RESOL. INT’L 195 (2018); Soterios Loizou, Revisiting the “Content-of-Laws” Enquiry in International Arbitration, 78 LA. L. REV. 811 (2018); Renato Nazzini, Enforcement of International Arbitral Awards: Res Judicata, Issue Estoppel, and Abuse of Process in a Transnational Context, 66 AM. J. COMP. L. 603 (2018); Yeshnah D. Rampall & Ronán Feehily, The Sanctity of Party Autonomy and the Powers of Arbitrators to Determine the Applicable Law: The Quest for an Arbitral Equilibrium, 23 HARV. NEGOT. L. REV. 345 (2018).