Civil Procedure & Federal Courts Blog

Ondersma on Human Rights and Mandatory Arbitration

Chrystin Ondersma has published Consumer Financial Protection and Human Rights, 50 Cornell Int’l L.J. 543 (2017). Here’s the abstract:

This summer the Consumer Financial Protection Bureau proposed a rule that would restrict the use of mandatory arbitration clauses in consumer financial credit contracts. With the administration and Congress seemingly eager to pull back on consumer financial regulations, it is crucial to examine the rights at stake. Many financial institutions have agreed to protect and promote human rights, so pressure from consumers, human rights organizations, and consumer protection advocates may succeed even though Congress has declined to promulgate the CFPB’s proposed rule. This Article argues that the existing binding, mandatory arbitration system in consumer credit contracts is inconsistent with human rights principles, including property rights, rights to be free from discrimination, and due process rights. This Article then evaluates the CFPB’s rule from a human rights standpoint, and explores the CFPB’s role in mitigating human rights concerns triggered by arbitration clauses in consumer credit contracts.

 

 

SCOTUS Decision on the Foreign Sovereign Immunities Act

Yesterday the Supreme Court issued a unanimous decision in Bolivarian Republic of Venezuela v. Helmerich & Payne Int’l Drilling Co., covered earlier here. The case involves the expropriation exception to the Foreign Sovereign Immunities Act (FSIA), which provides that foreign states are not immune from jurisdiction in U.S. courts when, among other things, “rights in property taken in violation of international law are in issue.”

Justice Breyer’s opinion concludes that it is not sufficient to “make a ‘nonfrivolous’ argument that the case falls within the scope of the exception.”

Rather, state and federal courts can maintain jurisdiction to hear the merits of a case only if they find that the property in which the party claims to hold rights was indeed “property taken in violation of international law.” Put differently, the relevant factual allegations must make out a legally valid claim that a certain kind of right is at issue (property rights) and that the relevant property was taken in a certain way (in violation of international law). A good argument to that effect is not sufficient. But a court normally need not resolve, as a jurisdictional matter, disputes about whether a party actually held rights in that property; those questions remain for the merits phase of the litigation.

Moreover, where jurisdictional questions turn upon further factual development, the trial judge may take evidence and resolve relevant factual disputes. But, consistent with foreign sovereign immunity’s basic objective, namely, to free a foreign sovereign from suit, the court should normally resolve those factual disputes and reach a decision about immunity as near to the outset of the case as is reasonably possible. See Verlinden B. V. v. Central Bank of Nigeria, 461 U. S. 480, 493–494 (1983).

Part III of the opinion contrasts the FSIA with 28 U.S.C. § 1331, finding that Bell v. Hood’s approach to the existence of a federal question does not apply to the FSIA’s expropriation exception.

Justice Gorsuch took no part in the consideration or decision of the case.

Download Venezuela v. Helmerich & Payne

 

 

 

 

SCOTUS Cert Grant on Corporate Liability under the Alien Tort Statute

Today the Supreme Court granted certiorari in Jesner v. Arab Bank, PLC. Here’s the question presented:

This case presents the question this Court granted certiorari to resolve, but ultimately left undecided, in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013): Whether the Alien Tort Statute, 28 U.S.C. § 1350, categorically forecloses corporate liability.

You can find all the cert-stage briefing—and follow the merits briefs as they come in—at SCOTUSblog.

 

 

 

Steinman on Delaney on Strategic Avoidance

Now running on the Courts Law section of JOTWELL is my essay, Comparative Avoidance. I review Erin Delaney’s recent article, Analyzing Avoidance: Judicial Strategy in Comparative Perspective, 66 Duke L.J. 1 (2016).

 

 

 

SCOTUS Cert Grant on Service by Mail Under the Hague Convention: Water Splash v. Menon

Today the U.S. Supreme Court granted certiorari in Water Splash, Inc. v. Menon. Here is the question presented:

In 1965, the member states of the Hague Conference on Private International Law, including the United States, adopted a treaty known as the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (“Hague Service Convention”). The Hague Service Convention enables service of process from one member state to another without the use of consular or diplomatic channels. This case presents the following federal question on which state and federal courts have been divided for over 25 years:

Does the Hague Service Convention authorize service of process by mail?

You can find all the cert-stage briefing—and follow the merits briefs as they come in—at SCOTUSblog.

 

 

 

Delaney on Avoidance

Erin Delaney has posted on SSRN her article, Analyzing Avoidance: Judicial Strategy in Comparative Perspective, 66 Duke L.J. 1 (2016). Here’s the abstract:

Courts sometimes avoid deciding contentious issues. One prominent justification for this practice is that, by employing avoidance strategically, a court can postpone reaching decisions that might threaten its institutional viability. Avoidance creates delay, which can allow for productive dialogue with and among the political branches. That dialogue, in turn, may result in the democratic resolution of — or the evolution of popular societal consensus around — a contested question, relieving the court of its duty. Many scholars and judges assume that, by creating and deferring to this dialogue, a court can safeguard its institutional legitimacy and security.

Accepting this assumption arguendo, this Article seeks to evaluate avoidance as it relates to dialogue. It identifies two key factors in the avoidance decision that might affect dialogue with the political branches: first, the timing of avoidance (i.e., when in the life cycle of a case does a high court choose to avoid); and, second, a court’s candor about the decision (i.e., to what degree does a court openly acknowledge its choice to avoid). The Article draws on a series of avoidance strategies from apex courts around the world to tease out the relationships among timing, candor, and dialogue. As the first study to analyze avoidance from a comparative perspective, the Article generates a new framework for assessing avoidance by highlighting the impact of timing on the quality of dialogue, the possible unintended consequences of candor, and the critical trade-offs between avoidance and power.

 

 

 

 

The Justice Against Sponsors of Terrorism Act: Congress Narrows Foreign Sovereign Immunity

Last week Congress voted to override President Obama’s veto of the Justice Against Sponsors of Terrorism Act (JASTA). Although there’s apparently been some “buyer’s remorse” by members of Congress who voted to override the veto, JASTA’s provisions narrowing sovereign immunity are now in effect.

Among other things, JASTA adds a new provision to Title 28 of the U.S. Code: 28 U.S.C. § 1605B. Subsection (b) of the new provision states:

(b) RESPONSIBILITY OF FOREIGN STATES.—A foreign state shall not be immune from the jurisdiction of the courts of the United States in any case in which money damages are sought against a foreign state for physical injury to person or property or death occurring in the United States and caused by—

(1) an act of international terrorism in the United States; and

(2) a tortious act or acts of the foreign state, or of any official, employee, or agent of that foreign state while acting within the scope of his or her office, employment, or agency, regardless where the tortious act or acts of the foreign state occurred.

Subsection (d) provides: “A foreign state shall not be subject to the jurisdiction of the courts of the United States under subsection (b) on the basis of an omission or a tortious act or acts that constitute mere negligence.’’

Download Justice Against Sponsors of Terrorism Act (JASTA)

 

 

 

Second Circuit Opinion on the Alien Tort Statute: Licci v. Lebanese Canadian Bank

Today the U.S. Court of Appeals for the Second Circuit handed down another post-Kiobel decision on the Alien Tort Statute (ATS). Licci v. Lebanese Canadian Bank involves claims against a Lebanese bank alleging that they provided international financial services to Hezbollah that facilitated Hezbollah’s rocket attacks on civilians in Israel.

From the opinion’s introductory paragraphs:

This case is not new to our Court. In fact, this appeal is in its third appearance before us in the last five years. In our prior opinions, we determined (with an assist from the New York Court of Appeals, see Licci v. Lebanese Canadian Bank, SAL, 20 N.Y.3d 327, 339 (2012) (“Licci III”)) that the District Court had personal jurisdiction over defendant LCB, and that subjecting the foreign bank to personal jurisdiction in New York comports with due process protections provided by the United States Constitution. See Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161, 165 (2d Cir. 2013) (“Licci IV”); Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 73–74 (2d Cir. 2012) (“Licci II”). This case presents a different question: Whether the District Court has subject matter jurisdiction over Plaintiffs’ ATS claims. The District Court dismissed the ATS claims under Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013) (“Kiobel II”), reasoning that Plaintiffs failed to displace the presumption against extraterritorial application of the ATS. Though we disagree with the District Court’s basis for dismissal, we affirm because the ATS claims seek to impose corporate liability in contravention of our decision in Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111, 145 (2d Cir. 2010) (“Kiobel I”).

Here’s the full opinion:

Download Licci v. LCB (2d Cir 2016)

Particularly notable is the Second Circuit’s discussion of the Supreme Court’s Kiobel decision [pp.18-30 of the opinion], and its conclusion that “Plaintiffs have surpassed the jurisdictional hurdle set forth in Kiobel II, 133 S. Ct. at 1669.”

 

 

 

 

 

Dodge on International Comity

Bill Dodge has posted on SSRN a draft of his article, International Comity in American Law, which will be published in the Columbia Law Review. Here’s the abstract:

International comity is one of the principal foundations of U.S. foreign relations law. The doctrines of American law that mediate the relationship between the U.S. legal system and those of other nations are nearly all manifestations of international comity — from the conflict of laws to the presumption against extraterritoriality; from the recognition of foreign judgments to doctrines limiting adjudicative jurisdiction in international cases; and from a foreign government’s privilege of bringing suit in the U.S. courts to the doctrines of foreign sovereign immunity. Yet international comity remains poorly understood. This article provides the first comprehensive account of international comity in American law. It has three goals: (1) to offer a better definition of international comity and an analytic framework for thinking about its manifestations in American law; (2) to explain the relationship between international comity and international law; and (3) to challenge two widespread myths — that international comity doctrines must take the form of standards rather than rules and that international comity determinations should be left to the executive branch. I show that international comity doctrines are frequently expressed as rules rather than standards, and that courts are usually in a better position to apply them than the executive branch.

 

 

 

Wiessner on Mass Claims in the Context of Argentina's Debt Defaults

My colleague Siegfried Wiessner, Professor of Law and the Director of St. Thomas' Graduate Program in Intercultural Human Rights, has posted on SSRN his article Democratizing International Arbitration? Mass Claims Proceedings in Abaclat v. Argentina.  This is a fascinating account of the decision of the International Center for the Settlement of Investment Disputes to allow some 60,000 individual Italian bondholders to proceed against Argentina for its default on those bonds – the first mass claim presented before an ICSID tribunal.  In support of the ICSID's decision, Professor Wiessner surveys US class action practice, the European Union's collective redress mechanisms (including representative collective actions, group actions, and test cases), and International Mass Claims Commissions.

Abstract:     

Mass claims have been accepted, in principle, in the landmark 2011 ICSID Decision on Jurisdiction and Admissibility of Abaclat v. Argentina. Welcoming this development as providing novel access for the common man and woman to international investment arbitration, the author explores related streamlined procedures in domestic and international law -- such as class actions and international mass claims commissions as well as vanguard use of technology and statistical methods -- that allow the processing of a high number of claims arising from common factual and/or legal issues with a view toward elaborating rules and mechanisms tailor-made for the context of international arbitration.

Abu Ghraib Prisoners' Claim Allowed Under Alien Tort Statute

The opinion by Judge Keenan in Al Shimari v. CACI Premier Technology, Inc., No. 13-1937 (4th Cir. June 30, 2014) sums it up:

In this appeal, we consider whether a federal district court has subject matter jurisdiction to consider certain civil claims seeking damages against an American corporation for the torture and mistreatment of foreign nationals at the Abu Ghraib prison in Iraq.  The primary issue on appeal concerns whether the Alien Tort Statute, 28 U.S.C. § 1350, as interpreted by the Supreme Court in Kiobel v. Royal Dutch Petroleum Co., 133 S. Ct. 1659 (2013), provides a jurisdictional basis for the plaintiffs’ alleged violations of international law, despite the presumption against extraterritorial application of acts of Congress.  We also address the defendants’ contention that the case presents a “political question” that is inappropriate for judicial resolution under our decision in Taylor v. Kellogg Brown & Root Services, Inc., 658 F.3d 402 (4th Cir. 2011). 

We conclude that the Supreme Court’s decision in Kiobel does not foreclose the plaintiffs’ claims under the Alien Tort Statute, and that the district court erred in reaching a contrary conclusion. Upon applying the fact-based inquiry articulated by the Supreme Court in Kiobel, we hold that the  plaintiffs’ claims “touch and concern” the territory of the United States with sufficient force to displace the presumption against extraterritorial application of the Alien Tort Statute.  See Kiobel, 133 S. Ct. at 1669. However, we are unable to determine from the present record whether the claims before us present nonjusticiable political questions.  Therefore, we do not reach the additional issue of the district court’s dismissal of the plaintiffs’ common law claims, and we vacate the district court’s judgment with respect to all the plaintiffs’ claims and remand the case to the district court. We direct that the district court undertake factual development of the record and analyze its subject matter jurisdiction in light of our decision in Taylor and the principles expressed in this opinion.

Congratulations to Civil Procedure Professors Erwin Chemerinsky, Helen Hershkoff, Allan Paul Ides, Stephen I. Vladeck, and Howard M. Wasserman, who submitted an amicus brief on behalf of the plaintiffs-appellants. 

Supreme Court Allows Subpoenas on Banks With Argentina's Accounts

In the continuing worldwide drama over Argentina's 2001 debt default, Argentina loses another round.  Republic of Argentina v. NML Capital, Ltd., No. 12-842 (U.S. June 16, 2014).  Its creditor, NML Capital, which Argentina owes about $2.5 billion, has pursued postjudgment execution on Argentina's property since 2003.  In 2010, NML subpoenaed two nonparty banks, Bank of America and an Argentinian bank with a branch in New York City.  The subpoenas sought documents relating to accounts maintained by Argentina. 

Argentina and BoA moved to quash the BoA subpoena (the Argentinian bank just didn't comply), and NML moved to compel.  The district court granted the motion to compel, and the Second Circuit affirmed.

The Supreme Court also affirmed, rejecting Argentina's argument that the Foreign Sovereign Immunities Act prohibited discovery of Argentina's extraterritorial assets.  Before its discussion of the FSIA, the Court discussed a Federal Rule of Civil Procedure -- Rule 69 -- that is rarely, if ever, mentioned in first-year civil procedure casebooks.  (Hint, hint, casebook authors!)  The Court noted that "[t]he rules governing discovery in postjudgment execution proceedings are quite permissive," citing Rule 69(a)(2), which allows a judgment creditor to take discovery "from any person -- including the judgment debtor -- as provided in the rules or by the procedure of the state where the court is located."  The Court assumed without deciding that "in a run-of-the-mill execution proceeding [one where the judgment debtor is not a foreign state] . . . the district court would have been within its discretion to order the discovery from third-party banks about the judgment debtor's assets located outside the United States."

The question was thus whether the FSIA required a different result when the judgment debtor was, in fact, a foreign state.  The FSIA, passed in 1976, confers two kinds of immunity on foreign states, jurisdictional (which Argentina waived) and execution immunity, which immunizes property in the United States of a foreign state from attachment and execution, with some exceptions.  

"There is no third provision forbidding or limiting disocvery in aid of execution of a foreign-sovereign judgment debtor's assets," notes Justice Scalia for the majority.  "[T]he reason for these subpoenas is that NML does not yet know what property Argentina has and where it is, let alone whether it is executable under the relevant jurisiction's law."   The Court also dismissed concerns about international relations, suggesting that such an argument was better addressed to Congress.

Justice Ginsburg dissented.  Justice Sotomayor took no part.      

   

Tidmarsh on Civil Procedure Reforms in the U.K.

Now on the Courts Law section of Jotwell is a review by Jay Tidmarsh (Notre Dame) entitled Jackson.

It’s not about the Yankees slugger, or the Johnny Cash & June Carter classic, or the capital city of Mississippi. It’s about recent procedural reforms in the United Kingdom, initiated by – and named for – Lord Justice Rupert Jackson. 

 

International Court of Justice Conference: The ICJ in the Service of Peace and Justice

On Monday, September 23, 2013, the International Court of Justice (ICJ) will celebrate the Centenary of the Peace Palace with a conference that will consider the following four topics:

1.  A Century of International Justice and Prospects for the Future;

2. The International Court of Justice and the International Legal System;

3. The Role of the International Court of Justice for Enhancing the Rule of Law; and 

4. The International Court of Justice and the United Nations: Relationship of the ICJ with other UN Organs.  

A detailed conference agenda can be found here: http://www.icj-cij.org/presscom/files/4/17524.pdf.

And, information about how to view the conference either by live streaming or on-demand can be found  here: http://www.icj-cij.org/presscom/files/4/17534.pdf. 

 

Strong on Commercial Arbitration

S.I. Strong (Missouri/Supreme Court Fellow) has posted two articles about international commercial arbitration to SSRN.

Beyond the Self-Execution Analysis:  Rationalizing Constitutional, Treaty and Statutory Interpretation in International Commercial Arbitration.  

International commercial arbitration has long been considered one of the paradigmatic forms of private international law and has achieved a degree of legitimacy that is virtually unparalleled in the international realm. However, significant questions have recently begun to arise about the device’s public international attributes, stemming largely from a circuit split regarding the nature of the New York Convention, the leading treaty in the field, and Chapter 2 of the Federal Arbitration Act, which helps give effect to the Convention in the United States.

Efforts have been made to place the debate about the New York Convention within the context of post-Medellin jurisprudence concerning self-executing treaties. However, that framework does not adequately address the difficult constitutional question as to what course should be adopted when a particular issue is governed by both a treaty and a statute that is meant to incorporate that treaty into domestic law.

This Article addresses that question by considering the role of and relationship between the New York Convention and the Federal Arbitration Act, and by providing a robust analysis of the constitutional, statutory and public international issues that arise in cases involving international treaties and incorporative statues. Although the discussion is rooted in the context of international commercial arbitration, the Article provides important theoretical and practical insights that are equally applicable in other types of public international law.

Discovery Under 28 U.S.C. §1782:  Distinguishing International Commercial Arbitration and International Investment Arbitration.

For many years, courts, commentators and counsel agreed that 28 U.S.C. §1782 – a somewhat extraordinary procedural device that allows U.S. courts to order discovery in the United States “for use in a proceeding in a foreign or international tribunal” – did not apply to disputes involving international arbitration. However, that presumption has come under challenge in recent years, particularly in the realm of investment arbitration, where the Chevron-Ecuador dispute has made Section 1782 requests a commonplace procedure. This Article takes a rigorous look at both the history and the future of Section 1782 in international arbitration, taking care to distinguish between requests made in the context of international commercial arbitration and requests made in the context of international investment arbitration. In so doing, the Article considers issues relating to grants of jurisdiction, state interests and standard interpretive canons.

RJE

 

 

SCOTUS Decision in Kiobel v. Royal Dutch Petroleum

Today the Supreme Court decided Kiobel v. Royal Dutch Petroleum Co. (No. 10-1491), a long-pending case involving the Alien Tort Statute (ATS). Although the Court is unanimous that the ATS does not provide jurisdiction in this particular case, there is a 5-4 split on the reasoning.

Chief Justice Roberts authors the majority opinion, joined by Scalia, Kennedy, Thomas, and Alito. In addition, Justice Kennedy files a concurring opinion, and Justice Alito files a concurring opinion that Thomas joins.

Justice Breyer authors an opinion concurring in judgment, joined by Ginsburg, Sotomayor, and Kagan.

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Symeonides' 26th Annual Choice-of-Law Survey

Symeon Symeonides (Willamette) has posted on SSRN his Twenty-Sixth Annual Survey of American Choice-of-Law Cases, which will be published in the American Journal of Comparative Law. Here’s the abstract:

This is the Twenty-Sixth Annual Survey of American Choice-of-Law Cases. It is intended as a service to fellow teachers and students of conflicts law, in the United States and abroad.

Of the 4,300 cases decided in 2012 by state and federal courts, this Survey reviews 1,225 appellate cases, focusing on those cases that may contribute something new to the development or understanding of conflicts law, particularly choice of law. Highlights include:

Continue reading

SCOTUS Oral Argument Transcript in Kiobel v. Royal Dutch Shell

Today the Supreme Court heard oral argument in Kiobel v. Royal Dutch Shell (10-1491) for the second time. The transcript is available here.

Parenthetically, there are some interesting exchanges for folks who are teaching (or taking) 1L civil procedure, on topics such as (1) waiver of defenses by omitting them from pre-answer motions [pp.3-4], (2) federal question jurisdiction under 1331 [pp.17-20]; (3) Erie and general common law [pp.18-19]; and (4) the 2011 personal jurisdiction decisions [p.54].

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Cohen on Erie and International Law

Professor Harlan Cohen (Georgia) has posted on SSRN a draft of his article, International Law’s Erie Moment, which will be published in the Michigan Journal of International Law. Here’s the abstract:

Who fills international law’s gaps? Whether over the meaning of bilateral investment treaties, the standards regarding detainee transfer, or the rules of non-international armed conflict, courts and states are increasingly in conflict over the authority to say what the law is. With international law’s increased judicialization, two competing visions of international law have emerged: One, a gap-filled international law, in which law is developed slowly through custom, argument, and negotiation, and a second, gap-less, in which disputes are resolved through a form of common law adjudication.

Drawing on growing literature on the law outside of courts, particularly out-of-court settlements, the social norms of specialized business communities, and constitutional separation-of-powers, along with traditional customary international law, this paper demonstrates that the conflict between these two visions is much deeper than previously assumed. What emerges from these literatures are two radically different models of lawmaking, “negotiated law” and “adjudicated law,” that look different, act differently, rely on different sources of authority and legitimacy, and are to some extent in conflict with one another. Contrary to conventional wisdom, gap-filling by states and gap-filling by courts are not interchangeable.

The unrecognized differences between these two competing models of modern international law lie at the heart of longstanding doctrinal tensions over the nature/sources of customary international law and provide unseen inspiration for the brewing conflicts between courts and states for interpretative supremacy. International law has essentially reached its Erie moment. Only by recognizing the true nature of the conflict, only by recognizing the very different sources of judicial and state authority, only by forcing courts and states to justify their claims to interpretive authority, can we begin to resolve the tensions between these two models and discern the proper roles of courts and states on a modern international law.

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Carbonara & Parisi on Fee-Shifting

Professors Emanuela Carbonara (University of Bologna – Economics) and Francesco Parisi (Minnesota) have posted on SSRN a draft of their paper, Rent-Seeking and Litigation: The Hidden Virtues of the Loser-Pays Rule. Here’s the abstract:

In the past couple of decades, scholars have predominantly employed rent-seeking models to analyze litigation problems. In this paper, we build on the existing literature to show how alternative fee-shifting arrangements (i.e., the American rule and modified English rule) affect parties' litigation expenditures and their decisions to litigate. Contrary to the prevailing opinion, we discover some interrelated advantages of the English rule over the American rule, including the reduction of litigation rates and reduction of expected litigation expenditures. Our results unveil a hidden virtue of the English rule, showing that an increase in fee-shifting may have the effect of reducing total litigation costs and lead to a desirable sorting of socially valuable litigation.

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