Outline of Judicial Jurisdiction in an International Setting

Outline of Judicial Jurisdiction in an International Setting

1. The Basic Elements
-arising out of domestic requirements for executing personal jurisdiction, including the minimum contacts test of International Shoe. Evolved into a three-part test:
1. relatedness (for questions of specific jurisdiction-not needed to show for general jurisdiction, such that contacts are so strong as to try any case within that jurisdiction)
2. purposeful availment-being haled into court in the forum is foreseeable because of purposeful contacts/benefits derived.
3. reasonableness-a range of interests to be considered, including the burden on defendant (Worldwide Volkswagen Corp.)

Could want to choose a particular forum because:
-plaintiff-friendly courts in the US?
-difficulty of Foreign Law or ability to get a judgment
-cost?

Helicopteros v. Hall (1984)
Helicopter crash in Peru where four US citizens died. Employed by Peruvian company working on a pipeline, with subsidiary headquartered in TX. Helicopter company Colombian, but purchased several helicopters in TX. Contract for provision of helicopters in Houston (company reps flew there). No other TX contacts. Suit commences in state court, defendants argue lack of minimum contacts. Court finds here there are not enough contacts with TX, since one trip to TX doesn’t show systematic or continuous relationship.
Dissent: Increase in international activity should warrant increase in jurisdictional reach. While there wouldn’t be general jurisdiction over company in TX, argues that contacts enough to show specific jurisdiction (since tort significantly related to contacts from trip to TX).
-Why not in federal court? First, because there was no diversity (not complete diversity since one of the defendants was a TX corporation). And in order to remove to federal court, none of the parties can be from the same state where removal is sought.

Asahi Metal v. Superior Court (1987)
Motorcycle crash in CA, plantiff sues manufacturer of tire in Taiwan (Cheng-Shin). Company cross-claims to include Japanese manufacturer of tire valve (Asahi). Argue while a foreign corporation, knew products were to end up in US market, and so had purposeful availment. Court finds must be an act of defendant bringing about jurisdiction. Here, no other contact with state than stream of commerce (which does not satisfy purposeful availment), defending in court so far away would place high burden, and CA has less interest in hearing because original plaintiff in motorcycle accident no longer involved in litigation.
Concurrence: argue purposeful availment in this case, but would still come out on side of majority since the burden on defendant would be very high.
-would jurisdictional calculus change it this was a question of federal or international law, rather than CA or TX law?
-What about Perkins where Philippine company waiting out war in OH is sued? Plaintiffs felt it was a good case for them in Helicopteros, but in that case the company had an office in OH doing substantial business. Also, there may be an element of jurisdictional necessity that made it impossible to sue in the Philippines during this period.
-Ways to get around minimum contacts requirements…
-Could get around through indemnification clause, possibly through choice of forum or choice of law agreement. May not have been time period where this was common.
-Or also possibly insurance.

2. Jurisdictional Consequences of Corporate Structure
-Trying to reach a parent corporation through actions of a subsidiary.

-Besides protection from liability, why choose to organize a subsidiary?
-maximize profits within each group (tax consequences)
-create accessible lending risk and collateral pools
-minimize ease of compliance with labor and environmental regulations (vacation days, etc.)
-increase ease of profit assessment (i.e. packaging for sale, clarifying relationships)

-Should it matter that there may be a good non-jurisdictional reason for setting up a subsidiary?
-early view of Supreme Court in Cannon Manufacturing indicated that as long as the distinction between parent and subsidiary was “not a pure fiction” , then jurisdiction over parent would not be established. Not overruled, but substantially weakened by later cases.

-Jurisdictional basis probably reformulated by International Shoe, giving minimum contacts standard rather than older presence test.
-maybe foreign corporation could avoid liability as long as there was an “independent” relationship between subsidiary and parent. But this may be difficult to do in practice.

Roorda v. Volkswagenwerk (D.S.C. 1979)
Paralysis from injuries in car accident, allege car was defective. Couldn’t sue VWOA because not sold new to them. So tried to go after German manufacturer VWAG. Sue in SC because of 6-year statute of limitations (need to sue in SC here to recover). Question of whether VWAG’s contacts with SC were strong enough to warrant jurisdiction. Found jurisdiction because company availed itself through agents of SC market. VWOA wholly owned by VWAG, must comply with parent procedures for ordering and shipping, substantially directs daily business. Change of domicile purely to file suit is not a bar to exercising jurisdiction where test is otherwise met.
-different outcome if defendant were Renault, which no longer sells in the US, or Lamborghini, whose US sales are tiny and may not be present in places like South Carolina?

Bulova Watch Co. v. Hattori (EDNY 1981)
Watchmaker sues competitor after raiding staff allegedly in order to appropriate trade secrets. Defendant Hattori related to parent company Seiko and smaller subsidiaries in US. Seiko owns all stock in company, contracts for supply of watches, overlap of directors. Manager worked for Hattori before joining American subsidiary, acknowledged Hattori boss to be his boss, allegiance to parent company. State law allowed jurisdiction for companies “doing business in state” . Court finds that but for subsidiaries, Hattori would be doing business in NY. Operations a far cry from mere solicitation, but show purposeful availment of NY market, and specific jurisdiction since activities in NY give rise to claim, and strong relationship with parent corp. Therefore, jurisdiction.
-different from Asahi because there are clearly more purposeful contacts here with US market (whole case’s allegations would also show specific jurisdiction).
-may be suing parent here to make discovery easier (i.e. parent corporation is intimately involved, may be easier to get documents by naming them as party).

Wiwa v. Royal Dutch Petroleum (2001)
Suit of parent corporation because Shell US not involved in conspiracy. Allege human rights abuses, land appropriation, use of force to quell uprisings in Nigeria. Defendants contend lack of personal jurisdiction. Parent companies operate subsidiary Shell Nigeria. Allege minimum contacts in NY through stock exchange contacts (including local investor relations office, internet access, and evidence of other lawsuits where jurisdiction in NY was not contested). Question of whether NY statute would allow jurisdiction as “doing business” . Investor relations of meaningful importance to defendants, supported by them monetarily, and constitute continual and systematic presence in NY to support general jurisdiction.
-Why does federal jurisdiction to hear a case depend on the long-arm statutes of the states? FRCP 4(k)(1)(a) provides that federal courts will exercise jurisdiction where their state courts would also.

Conclusion

Notes

See Also

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References and Further Reading

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Foreign Law, State law.


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