April 11, 2011
Complete Disconnect: Does It Make Sense To Apply A Due Process-Based Personal Jurisdiction Test to Aliens?
I recently read a couple of interesting opinions, and a juxtaposition of the two raises a thought-provoking question, one addressed by Austen L. Parrish in his excellent article, Sovereignty, Not Due Process: Personal Jurisdiction Over Nonresident, Alien Defendants, 41 Wake Forest L. Rev. 1 (2006). The first of these was Doe v. United States, 95 Fed.Cl. 546 (Fed.Cl. 2010), in which the United States Court of Federal Claims concluded that an Iraqi plaintiff did not have standing to raise, inter alia, a Fifth Amendment takings claim based upon occupation of his home by the U.S. military because he did not have substantial connections to the United States. The second of these was GSS Group Ltd. v. National Port Authority, 2011 WL 1195775 (D.D.C. 2011), in which the United States District Court for the District of Columbia concluded that it could not exercise personal jurisdiction over a Liberian defendant because it lacked sufficient minimum contacts with the United States. So, can these two opinions be reconciled?
The reason for the court's conclusion in Doe was United States v. Verdugo-Urquidez, 494 U.S. 259 (1990), in which the Supreme Court found that the Fourth Amendment did not apply to the search of the Mexican residence of a Mexican defendant by DEA agents. In rejecting the defendant's citation to a series of cases in which it had held that aliens enjoy certain constitutional rights, the Court distinguished these cases, holding that they "establish[ed] only that aliens receive constitutional protections when they have come within the territory of the United States and developed substantial connections with this country." Because the Iraqi plaintiff in Doe, like the Mexican defendant in Verdugo-Urquidez, lacked substantial connections to the United States, he lacked standing to raise a Fifth Amendment takings claim.
Meanwhile, in GSS, the GSS Group, Ltd. filed a petition for the confirmation of arbitration awards against the National Port Authority (NPA), a Liberian public corporation, in the United States District Court for the District of Columbia. In response, the NPA, inter alia, moved for dismissal, claiming that the court could not "constitutionally exercise personal jurisdiction over the NPA because the NPA does not have the requisite 'minimum contacts' with the United States." The court agreed, finding that GSS had "not demonstrated, [n]or even attempted to demonstrate, that the [NPA] has any contacts with the United States," meaning that the court could not exercise personal jurisdiction over it.
In reaching this conclusion, the court found that the NPA was independent from its sovereign, meaning that "the rule that a foreign government has no due process rights [wa]s not applicable to the NPA." Moreover, the court rejected GSS' argument that "that the NPA nevertheless lacks due process rights because 'there is no [constitutional] distinction to be drawn...between agencies controlled by a foreign state and agencies managed independently of the foreign state.'" According to the court,
Although this argument seems counterintuitive, GSS purports to find support for it in dicta in TMR Energy Ltd. v. State Property Fund of the Ukraine. While ruling in that case that a foreign instrumentality that functions as an agent of its sovereign has, like the sovereign itself, no due process rights, the court of appeals noted that "[i]t is far from obvious that even an independent [instrumentality] would be entitled to the protection of the [F]ifth [A]mendment." TMR Energy Ltd. v. State Property Fund of the Ukraine, 411 F.3d at 302 n.*. The court accompanied that statement with citations to cases in which the Supreme Court or the court of appeals had held that aliens without connections to the United States could not claim the benefit of constitutional protections. Id. (citing United States v. Verdugo-Urquidez, 494 U.S. 259 U.S. 259, 271 (1990); Jiffy v. FAA, 370 F.3d 1174, 1182 (D.C. Cir. 2004)).
The court of appeals' passing comment is well taken. It is not clear why foreign defendants, other than foreign sovereigns, should be able to avoid the jurisdiction of United States courts by invoking the Due Process Clause when it is established in other contexts that nonresident aliens without connections to the United States typically do not have rights under the United States Constitution. Accord TMR Energy Ltd. v. State Property Fund of the Ukraine, 411 F.3d at 302 n.* ("[A]lthough courts often assume the minimum contacts test applies in suits against foreign 'persons,' that assumption appears never to have been challenged."); see also Austen L. Parrish, Sovereignty, Not Due Process: Personal Jurisdiction Over Nonresident, Alien Defendants, 41 Wake Forest L. Rev. 1, 7 (2006) ("[T]he assumption that the same due process considerations apply equally to nonresident, alien defendants as to domestic defendants in the personal jurisdiction context is doctrinally inconsistent with broader notions of American constitutionalism."). Nevertheless, while the notion that the minimum contacts test must be satisfied before a court can exercise personal jurisdiction over a foreign nonresident defendant may coexist uneasily alongside other elements of constitutional theory, the notion is enshrined in law, including, as noted, Supreme Court precedent. This Court therefore is in no position to reject it.
But should the court have rejected it? That's the premise of Parrish's article, cited at the start of this post and in the court's opinion. In the article, Parrish notes that before the passage of the Fourteenth Amendment,
jurisdictional limits were a matter of common law, derived from international legal principles. Under international law, territorial jurisdiction "arose among a band of independent sovereigns, limited in what they could do, but more importantly limiting themselves in what they would do in order to avoid stepping on the others' toes." In the United States, jurisdiction was based on territoriality: a theory derived from Dutch scholars holding that "each sovereign had jurisdiction, exclusive of all other sovereigns, to bind persons and things present within its territorial boundaries." Jurisdiction was not a matter of constitutional law. To the extent the Constitution was relevant to jurisdictional precepts, only the Full Faith and Credit Clause was important, and the Supreme Court drew on international law to interpret it. The Full Faith and Credit Clause required states to recognize, without reexamination, sister-state judgments so long as the judgment remained faithful to international jurisdictional rules. These jurisdictional principles of international law were adopted in numerous early cases.
Indeed, even after the Amendment's passage, the Court's opinion in Pennoyer v. Neff, 95 U.S. 714 (1877), "was still faithful to the then existing international law," but by "rel[ying] on the Fourteenth Amendment's Due Process Clause...[,] it exalted the "theory of territorial sovereignty" to the status of constitutional doctrine." But, when it later decided International Shoe Co. v. Washington, 326 U.S. 310 (1945), the Court went "all-in" with the Fourteenth Amendment and kicked the strict territoriality-based approach to jurisdiction to the curb.
So, even though aliens usually cannot assert Constitutional rights if they lack substantial connections with the United States, they can claim that the exercise of personal jurisdiction over them would violate Due Process if (1) they lack minimum contacts with the U.S., or (2) more commonly, the exercise of personal jurisdiction over them would be unreasonable/unfair. So, does this make sense?
According to Parrish, the answer is "no," and he presents two proposals for alien personal jurisdiction, one which recalibrates the current Due Process test and one which abandons it altogether. With the first approach,
the change would come in how courts apply the fair play and substantial justice factors. Convenience and the defendant's burden should play little to no role in the jurisdictional analysis when the defendant is foreign, while state interests must play a greater role. Courts should refrain from making jurisdictional decisions based on the closeness of the foreigner to the forum state, or the availability of modern communications, or other superficial considerations such as the availability of discount plane tickets. Instead, the fair play and substantial justice factors, set forth in Asahi, should determine whether jurisdiction would be reasonable as that term is understood under international principles. Under this approach, courts would take much more to heart Asahi's cautions that international cases raise unique concerns. Special care would be given to ensure that jurisdiction is not exercised when the case implicates foreign relations. The immediate effect would be that courts would exercise jurisdiction in fewer instances, even when minimum contacts are met.
To the extent a foreign defendant's burden or inconvenience is accounted for, it should weigh against asserting jurisdiction when the case is likely to involve significant substantive or procedural differences unique to U.S. litigation. Generally, however, convenience concerns should be addressed solely at the sub-constitutional level utilizing venue and forum non conveniens.
Of course, under this approach, there still wouldn't be personal jurisdiction over defendants like the NPA which lack minimum contacts with the United States, and Parrish himself acknowledges that "this approach would not solve the deep-rooted problems present in the U.S. jurisdictional rules, but would be a first, small step in the right direction."
Parrish's more radical approach would
decouple the personal jurisdiction analysis from the Constitution altogether. This does not mean that as a nation we should turn back to Pennoyer's overly formalistic rules. Instead, what courts must do is appreciate the concept of reciprocity between sovereigns and understand the comparative standards for exercising jurisdiction in foreign legal systems. Like in the pre-Pennoyer days, notions of comity and the sovereign rights of foreign states, or other legislatively created restrictions, would limit jurisdiction.
As a matter of policy, the decoupling of personal jurisdiction from due process would be sensible. Several commentators have explained the policy benefits of deconstitutionalizing personal jurisdiction law, and there is no reason to rehash them here. At the very least, "we should pause before concluding that our government is constitutionally disabled from asserting jurisdiction over foreigners under circumstances in which other countries consider it entirely appropriate." Moreover, it would allow the United States to approach jurisdictional rules pragmatically, "unencumbered by the theoretical musings that dominate the American jurisdictional landscape." The only limits imposed would be those broad ones of international law to respect foreign state interests: interests that many cases will not implicate.
Because the jurisdictional limits sovereignty imposes are meager, in a deconstitutionalized personal jurisdiction world, legislative choices, in the form of a treaty, would be necessary to sensibly regulate jurisdiction. Personal jurisdiction cannot be a "free-for-all, unregulated phenomenon," and this Article does not suggest otherwise. The deconstitutionalizing of jurisdiction would, therefore, presumably refresh the need to reach agreement on a multilateral judgments treaty.
So, is this latter approach something that courts might adopt or something that courts like the United States District Court for the District of Columbia might mention in passing but feel like they are in no position to adopt? Well, according to Parrish,
Untethering personal jurisdiction analysis from the Due Process Clause, when the case involves alien defendants, is not as radical as might be first thought. Those scholars who have urged the Supreme Court to stop speaking of personal jurisdiction in constitutional terms face a significant hurdle: well over a hundred years of consistent precedent--since Pennoyer in 1877--holding that jurisdictional principles are constitutionally derived. But comparatively, no long-held precedent exists when the case involves nonresident aliens. The Supreme Court has only decided four personal jurisdiction cases involving foreign defendants. In none of these cases was the issue directly addressed or even litigated. And the cases the Court has decided could easily be limited to their unique facts.
Moreover, Parrish reads the tea leaves and concludes that such a change in approach could be in the cards when and if the Supreme Court resolves this issue. He notes that
in Burnham, the Court demonstrated its willingness to veer from precedent to arrive at what it believed to be a doctrinally and historically consistent result. Justice Scalia argued that history, antedating the Fourteenth Amendment, sanctioned transient jurisdiction, that International Shoe adhered to "traditional notions" of jurisdiction, and that nothing is more traditional that transient or "tag" jurisdiction. International sovereignty principles have a similarly impressive historical lineage and are certainly traditional in the truest of senses. Second, in both International Shoe and Shaffer v. Heitner, the Court was willing to reexamine jurisdictional precepts and craft new, previously unapplied jurisdictional rules. As Justice Brennan once explained, "[the court was] willing in Shaffer to examine anew the appropriateness of the quasi-in-rem rule--until that time dutifully accepted by American courts for at least a century" And of course, long practice does not necessarily make good law. Lastly, the Court itself seems to be well aware of the shortcomings of its own jurisprudence, which bode well for change.
I agree with Professor Parrish and would add that I find the juxtaposition of two other things to be odd. As noted, courts have difficulty finding personal jurisdiction over aliens. But once there is such jurisdiction, 28 U.S.C. Section 1391(d) provides that "[a]n alien may be sued in any district." Now, obviously, personal jurisdiction and venue are two separate concepts, but it seems strange to me that courts treat these concepts so differently. And, I think that Professor Parrish's proposal closes the gap between the two.
April 11, 2011 | Permalink