Monday, May 3, 2021

Interesting Fifth Circuit Decision on Personal Jurisdiction: Douglass v. Nippon Yusen Kabushiki Kaisha

On Friday, a panel of the U.S. Court of Appeals for the Fifth Circuit issued a very interesting per curiam decision in Douglass v. Nippon Yusen Kabushiki Kaisha. The case involves personal jurisdiction in federal court under FRCP 4(k)(2), which presents a different constitutional inquiry than most personal jurisdiction cases because it implicates the Due Process Clause of the Fifth Amendment rather than the Fourteenth Amendment.

The panel rejects jurisdiction, finding itself constrained by an earlier Fifth Circuit decision. But notwithstanding that case law, the Douglass panel finds the arguments in favor of jurisdiction “persuasive,” and Judge Elrod’s concurring opinion (joined by Judge Willett) calls for the en banc Fifth Circuit “to correct our course.” (In the interest of full disclosure, I joined an amicus brief with fellow civil procedure professors Helen Hershkoff, Arthur Miller, Alan Morrison, and John Sexton supporting the plaintiffs-appellants in this case.)

Here are the basic facts of Douglass from Part I of the per curiam opinion:

Defendant-appellee Nippon Yusen Kabushiki Kaisha (“NYK Line”) was involved in the operation and navigation of its chartered ship that collided with the U.S.S. Fitzgerald, a U.S. Navy destroyer, in the territorial waters of Japan. The collision killed seven sailors and injured at least forty others. After the incident, two sets of plaintiffs filed suit against NYK Line in the U.S. District Court for the Eastern District of Louisiana. * * * The plaintiffs-appellants in both cases asserted personal jurisdiction over NYK Line pursuant to Fed. R. Civ. P. 4(k)(2), alleging that, despite NYK Line’s status as a foreign corporation, its substantial, systematic, and continuous contacts with the United States should make NYK Line amenable to suit in federal court.

The crucial issue is the relevance of the Supreme Court’s recent case law on Fourteenth Amendment due process to the Fifth Amendment analysis. The decision summarizes the competing arguments as follows:

NYK Line argues that Fourteenth Amendment due process caselaw in this context constrains a Fifth Amendment due process analysis and that the jurisdictional test set forth in Daimler AG v. Bauman, 571 U.S. 117 (2014), is our guide. Plaintiffs-appellants, supported by distinguished amici,1 argue to the contrary. * * * The requirements of Fourteenth Amendment due process differ from those of the Fifth Amendment. Therefore, in deciding whether a court’s exercise of personal jurisdiction over a defendant comports with the Fifth Amendment’s Due Process Clause, we ought not to turn to recent Supreme Court cases interpreting the Fourteenth Amendment specifically. Rather, we should look to a defendant’s national contacts and follow the basic dictates of International Shoe Co., v. Washington, 326 U.S. 310, 319 (1945).2 Under the proposed “national jurisdiction” test, the inquiry is whether a foreign (i.e. non-U.S.) defendant, sued on a federal claim and not amenable to suit in any state court, was doing systematic and continuous business in the United States, and whether the claim at bar was related to that business.

The judges write that “we find plaintiffs-appellants’ position persuasive,” and the opinion describes the arguments in favor of the proposed national jurisdiction test. However, the panel finds itself “bound by the rule of orderliness to resolve this case under Daimler.” As the opinion explains, “the rule of orderliness prevents one panel of the court from overturning another panel’s decision, absent an intervening change in the law.” And an earlier Fifth Circuit opinion—Patterson v. Aker Solutions, Inc.—had “applied Daimler to resolve whether personal jurisdiction could be established under Fed. R. Civ. P. 4(k)(2). 826 F.3d at 234.” Ultimately, the Douglass panel finds jurisdiction is not constitutional under the Daimler standard:

To be sure, NYK Line has considerable contacts with the United States. But these are not “so substantial and of such a nature” that NYK Line is essentially rendered at home in the United States. Daimler, 571 U.S. at 139 (quoting Int’l Shoe, 326 U.S. at 318); see Patterson, 826 F.3d at 234 n.5.

Although the rule of orderliness requires three-judge panels to follow the decisions of earlier panels, the Fifth Circuit sitting en banc is not similarly bound. Judge Elrod emphasizes this in a brief concurring opinion, joined by Judge Willett. It begins:

I wholly concur in the well-reasoned majority opinion. I agree with the majority opinion that the case would be decided differently if we were not bound by Patterson v. Aker Solutions, Inc., 826 F.3d 231 (5th Cir. 2016). I further agree with the majority opinion that Patterson muddled the Fifth Amendment due process inquiry by applying Fourteenth Amendment caselaw. Our interpretation of Fourteenth Amendment due process is shaped by federalism concerns that are irrelevant to the Fifth Amendment context. I write separately to urge our court to correct our course and undo the unnecessary limitation we have imposed on Federal Rule of Civil Procedure 4(k)(2).

She concludes with the observation that the Douglass case “presents a good vehicle” for en banc review.

Stay tuned.

 

 

 

https://lawprofessors.typepad.com/civpro/2021/05/interesting-fifth-circuit-decision-on-personal-jurisdiction-douglass-v-nippon-yusen-kabushiki-kaisha.html

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