International Litigation

Professor Sheppard
Chapter 1. (Foreign defendants suit in U.S courts)
Section 1. Suing Foreign Defendants in United States Courts Problems of In Personam
and In Rem Jurisdiction.
Strategic considerations and factors why a plaintiff would want to maintain suit in a United States
court and why a foreign defendant would want to close that forum.
In order to any court have jurisdiction it is necessary to have subject matter jurisdiction and personal
jurisdiction.
Subject Matter Jurisdiction:
- Federal Question
- Diversity: alienage
- Admiralty
1. Personal Jurisdiction: Due process limits on the assertion of personal jurisdiction over
foreign defendants. 14th (states)/5th (fed) Amendment. The SC in constructing the due
process clause: minimum contacts and the notion of fair play.

1.1 Minimum contact:

General Jurisdiction: Defendants contacts with the state must be so continuous and
systematic that Plaintiff can sue Defendant there although the cause of action does not arise
out of and is not related to Defendants activities in the state. (Helicopteros case make this
very difficult to establish) Examples (pg. 6):
Domicile
Incorporation
Principal place of business
Temporary physical presence.
Doing business; subject to helicopteros limitations

If we are talking about General Jurisdiction, then the state needs a long arm statute to the fullest
extent of the due process clause.
Note: as a lawyer you better plead both general and specific. In the helicopteros case if they would
have pleaded both they would have gotten it.

Specific Jurisdiction:
The defendant must purposefully avail itself of the privilege of conducting activities in the
state.
The cause of action must arise out of or be related to these activities.
The exercise of jurisdiction must be reasonable under factors enumerated in Ashahi Case.
Three of these factors are:
- The defendants burden in litigating in the forum.
- The reasonable interest of the plaintiff in being able to litigate in the forum.
- The interest of the forum in opening its courts to the litigation.

Notes:
- In order to apply the doctrine of forum non-conveniens, you need to establish personal
jurisdiction first.
- Derogation: An agreement in order to have an exclusive forum for litigation
- Gasperini: (pg. 10): in diversity cases, quantification of damages is substantive for purposes
of the duty of the federal courts to apply state law.
- Recognition of Judgments (pg. 10-11): (1) Sister State Judgments and (2) Foreign Judgments
(this part of the book contains policy analysis)

Analysis of the two-pronged test SCOTUS has established in to limit the assertion of Personal
Jurisdiction: minimum contacts and fairness. If you have a federal court sitting in diversity,
you must satisfy personal jurisdiction on the basis of the state long arm statute as well as the
two-prong test.

Due process:
1.1. Minimum Contacts
- General Jurisdiction: Continuous and Systematic contact.
- Specific Jurisdiction: arising out of and related to the actions of D.
1.2. Fairness: substantial notion of fair play and fairness. --(Asahi)
Helicopteros Nacionales de Colombia, S. A. v. Hall, (1984): Minimum Contacts
This case establishes a distinction between general and specific jurisdiction, underscoring the need
to begin a minimum contacts analysis by asking two questions: (1) did the action arise out of the
s actions in the forum state, and (2) has the engaged in systematic and continuous contact with
the forum state. It also demonstrates that the threshold contacts required for general jurisdiction are
very substantial, indeed, since Helicopteros had many associations with Texas, but none were
enough to satisfy the court. (Pp. 11 and note 2 in pp.15)
These
-

are the things that are lacking (pg. 12-second full paragraph).
No agent
No products
No soliciting
No purposeful availment.

Plaintiff needs: (it has to have the three, one is not enough)
- Long arm statue.
- Minimum contact.
- Fairness.
Asahi Metal Industry Co., v. Superior Court (1987): Fairness
Facts: (Cheng Shin settled with PCalifornia court did not decide liability) --Asahi Metal Industry Co.
was an international corporation based in Japan, which manufactured a valve used in the
manufacture of motorcycle wheels. Cheng Shin bought the valves (Taiwanese distributor). One of
these valves was alleged to have failed, causing an accident in California. As a result of the accident
the driver of the motorcycle sustained serious injuries and his wife, who was riding on the motorcycle
as a passenger, was killed. The accident victim sued Cheng Shin in a California state court, and
Cheng Shin in turn filed a third-party complaint (impleader) seeking indemnification from Asahi.
Asahi contested California's personal jurisdiction over Asahi, but the California courts found
jurisdiction based on Asahi's alleged awareness of the international distribution of its products.
Specifically, Asahi moved to quash Cheng Shin's summons. The California Superior Court denied the
motion but the Court of Appeals issued a writ of mandamus to the state of California telling them to
quash the summons. The California Supreme Court reversed this decision, leading Asahi to appeal to
the United States Supreme Court.
Holding and Reasoning: The Supreme Court applied a five-factor test in determining whether
"traditional notions of fair play" would permit the assertion of personal jurisdiction over a foreign
(meaning out-of-state) defendant: What is the burden on the defendant? What are the interests of
the forum state in the litigation? What is the interest of the plaintiff in litigating the matter in that
state?, Does the allowance of jurisdiction serve interstate efficiency?, Does the allowance of
jurisdiction serve interstate policy interests? The Court found that in this case, the burden on the
defendant was severe based on both the geographic distance and legal dissimilarities between Japan
and the United States. Cheng Shin was not a California resident, diminishing California's interest in
the case. Cheng Shin also did not show that it would be inconvenienced if the case for
indemnification against Asahi were heard in Japan or Taiwan instead of California. Finally, neither
interstate efficiency nor interstate policy interests would be served by finding jurisdiction.

Because an assertion of jurisdiction would disturb the "traditional notions of fair play and substantial
justice," the decision of the California Supreme Court was reversed and the judgment of California
Court of Appeal (California's intermediate appellate court) was effectively reinstated.
The Supreme Court in California adopted the notion that by placing in the stream of commerce is
enough to establish jurisdiction. The decision was divided 4-4. (Pp. 20)

Stream of commerce theory as a basis to establish minimum contacts to maintain personal

jurisdiction over a foreign defendant. Fairness prong of due process standard as an
independent limitation on the assertion of personal jurisdiction over foreign defendants.

Minimum Contacts do not mean mere foreseeability, (stream of commerce question) it

means an action of the defendant purposefully directed at the forum. (Brennan opinion)it is
unfair, but there are sufficient minimum contacts. (Steven opiniondisagree with minimum
contact but it is definitely not fair)
Even when there are minimum contacts, it can be unfair to establish jurisdiction. Case
dismissed.

IIB: Fairness Test: the whole court agreed that it was no fair. (Asahifirst time)
1. Burden on Defendant.
2. Interests of the Plaintiffs in retaining relief
3. Interests of the Forum State California does not have any interest
The interstate judicial systems interest in obtaining the most efficient resolution of
controversies; and the shared interest of the several States in furthering fundamental
substantive policies citing Volkswagen.

Notes:
-

Watch out for the stream of commerce problem? --Courts are split.
Traditional Notions of fair play and substantial justice.
Is it reasonable to assert jurisdiction?
Supr. Court is split on the stream of commerce theory that is, whether a state court can
exercise personal jurisdiction over a component manufacturer who is aware that the finished
product would reach the forum state (thus putting the item in the stream of commerce).

Rule: Whether putting an item in the stream of commerce is sufficient to create minimum
contacts is an open question. OConnor said minimum contacts can only come if the s
action was purposefully directed to the forum state. She and three other justices said that the
mere placing of a product into the stream of commerce, and nothing more, is not a
purposefully directed act toward the forum state. Professor Weintraubs says this presents a
huge problem because component manufacturers could purposefully avoid liability by having
their products distributed by a third party, independent distributor.

The 5th Circuit (Texas) does not follow IIA: If you place things into the stream of commerce,
then youve availed. (Note 3)you will like to file in federal court instead of Texas state court
since they do not see foreseeability as sufficient element to establish jurisdiction. Pp. 24-25.

If minimum contacts were satisfied, it would be extremely unusual for the exercise of
jurisdiction to be unreasonable, because the interests of the and the forum will generally
justify even a serious burden on the . Asahi Metals v. Superior Court

Marathon Oil Co. v. Ruhrgas. (Handout 1) Motion to dismiss special appearance. The
defendant has the burden of proven. Why is not continuous and systematic? Once D does the special
appearance the burden shift to P.
Just because D has been properly served that does not mean that there is jurisdiction. (Discuss later)
GOTCHA Pp. 46 note 4.
Brussels I. European Union. (Pp. 27)to compare with US system. (No exam material)

Chapter 1. Scope: civil and commercial matters. Exception: revenue, custom or administrative
matters. (Pp.27)general jurisdiction.
Chapter 2. Jurisdiction: this seems like it would come into play for a forum non-conveniens problem.
How do you get jurisdiction over a foreign defendant? (Pp. 28)
General Jurisdiction: provides for allowing a domiciliary of a contracting state to acquire personal
jurisdiction over a nonresident.
Special Jurisdiction:
A person domiciled in a member state. (Articles 5-6, pp. 29) Fairness test? Asahi (art. 5 (3)
and 6 (2))
Article 60, natural/legal person domicile is where it has: statutory seat, central administration, or
principal place of business.
US is broader allowing continuous and systematic contacts to establish jurisdiction.
No real stream of commerce test only:
- Where the damage occurred or
- Where harm arose. (Pp. 45 P. 3)
German Courts refuse to apply the domiciliary test alone. They want a sufficient connection between
the litigation and Germany (pp.46). It narrowed the jurisdiction scope.
Article 21. Enjoining suit abroad. The court first seized has priority. All other courts shall stay its
proceedings until the jurisdiction of the first seized court is established one way or the other.
Article 33: Like the full faith and credit clause
- A judgment given in a Member State shall be recognized in the other Member States without
any special procedure being required.
Meier v. Sun International Hotels, (2002).
Facts: plaintiff father and two sons were vacationing in the Bahamas. One of the sons, Victor, was
snorkeling. A motorboat (owned and operated by one of the defendants properties in Atlantis) struck
him inflicting serious injuries. Victor was flown to Miami for medical treatment. Plaintiffs are from
Utah. Defendants are corporations from Bahamas and they own and operate various hotel properties
in the Bahamas. Plaintiff sued defendants in Federal court in Florida alleging negligence. Defendants
moved to dismiss for lack of jurisdiction, district granted.
Holding: reverse and remanded, for consideration of the forum no conveniens motion.
Reasoning:
Sun has several bank accounts in Florida.
Florida subsidiaries conduct business only for defendants.
Same group of people managing both Bahamas/Florida.
Florida subsidiaries (agents)
Substantial and not isolated activities, satisfying Florida Long Arm-Statue.
14th amendment (minimum contact/fair play): cannot be based in the actions of an agent, but
there are continuous and systematic contacts through the activities of the Florida subsidiaries.
(Pp.50 general jurisdiction)
Fair Play (Intl shoe test) the court based the decision in the interest of Florida in resolving the
matter and also based in the plaintiff income and how much the defendants spend in
advertisement in the US.
Miller case is the opposite of Meier. (Pp. 51 note 1) in the Meier case the activities performed by the
agency were attributable to them in the second not.
Toys R Us, Inc. v. Step Two, S.A, (2003)
Facts: Toys a Delaware corporation headquartered in New Jersey, acquired Imaginarium (toys
center and trade marks), they own the brand in the U.S and also operates Imaginarium shops within

some Toys stores in the U.S (educational toys). Step Two is a Spanish corporation, they have
franchised stores operating in Spain and other countries in Europe, and they have the same logo as
Toys Imaginarium stores and sale the same type of merchandise. The 2 parties use websites to boost
sales. Before, Toys acquired Imaginarium it registered the domain Imaginarium.com and the next
year Step Two registered Imaginarium.es (since them both parties have registered different domains
including the name) 2S has 4 websites operating entirely in Spanish, the contact telephone is also
from Spain, as well as prices and they can only ship within Spain. Two toys employees both residents
of New Jersey placed orders in the 2S web site and the toys were delivered in Spain and later
forwarded to New Jersey. (Both received and e-mail confirmation and invitations to joint the club, one
of the registered and received newsletters) Toys allege trademark infringement in a federal district
court in New Jersey. S2 motion for lack of jurisdiction, Toys requested discovery in the jurisdictional
issue, district court denied it and granted S2 motion. Third circuit reversed and remanded
jurisdictional discovery and to reconsider jurisdiction in light of that discovery.
Issue: specific personal jurisdiction.
Holding and Reasoning: jurisdiction reconsideration and jurisdictional discovery. The court concluded
that Toys did not have the chance to proof if there was something more to establish jurisdiction,
and the determination whether there are the internet and non-internet contacts required to support
personal jurisdiction is a determination that has to be made on a case by case basis and there is too
limited discovery to decide it. District court erred in denying Toys request for discovery. (Personal
availment pp. 54b) note 1 pp.57.
Shaffer v. Heitner, (1977) In rem jurisdiction. When to use minimum contacts
Is it different when dealing with property? Property is directly related to the interest of
people.
Minimum contacts and general jurisdiction. Pp. 63- 64.
Hold: Use the minimum contacts and fairness test for In Rem as well as In Personam. Hold 2:
Plaintiff cannot use the property not connected to the litigation in order to get In Rem (that
fails the fairness test).
The Concurrence in Heitner: They want an exception to the rule for Real Estate.
Liability is limited to the value of the property in an In Rem case.
Louring v. Kuwait Boulder Shipping Co, (1977). When not to use minimum contacts.
Presence of s property in state was sufficient basis for jurisdiction even if usual minimum contacts
test was not satisfied, where made no claim that it was subject to jurisdiction in any other state
and where there were sufficient contacts to make assertion of quasi in rem jurisdiction fair. (I.e.,
there was nowhere else for the plaintiff to sue, since it was a Kuwait corporation, and it owed debt in
Conn). Kuwait Corporation could not claim disadvantage in defending in Connecticut rather than
some other state.
Section 2. Agreement to Litigate or Arbitrate Abroad.

Forum selection clause.

Arbitration clause.

The Bremen v. Zapata Off-Shore Company, (1972).

Facts: Zapata (Houston based Co.) contracted with petitioner, Unterweser (German Co.), to tow
Zapatas ocean-going, self-elevating drilling rig Chaparral from Louisiana to a point off Italy, where
Zapata had agreed to drill certain wells. The contract contains that any issue arising must be
treated before the London Court of Justice. While performing the contract the flotilla was in
international waters in the middle of the Gulf of Mexico, a severe storm arose, and the Chaparral was
seriously damaged. In the emergency situation Zapata instructed the Bremen to tow its damaged rig
to Tampa, Florida, which was the nearest point of refuge. Zapata ignoring the clause commenced a
suit in admiralty seeking damages in Personam and the Bremen in rem in the United States.
Unterweser commenced an action seeking damages for breach of contract in London. The court in
Florida gave to the forum-selection clause little, if any weight, they held it was unenforceable, and

contrary to public policy, and the balance of convenience was not is favor of Unterweser.
Unterweser also invoke the US jurisdiction when asked to obtain the benefit of the Limitation Act.
Issue: Whether or not United State courts in Florida has jurisdiction over the mater even when the
contract shows a clause promising to litigate in the English courts?
Holding and Reasoning: US courts had not jurisdiction. The argument that the clause is improper is
just a legal fiction. The courts should have only give effect to the legitimate expectations of the
parties manifested in their freely negotiated agreement, by specifically enforcing the forum clause.
The Chaparral could have been damaged at any point along the route, and there were countless
possible ports of refuge. That the accident occurred in the Golf of Mexico and that the barge towed to
Tampa in an emergency were mere fortuities. There is no doubt that the parties sought to provide for
a neutral forum for the resolution of any dispute arising during the tow. There was not fraud or
overreaching in the content of the clause.
Notes:
One of the problems here is that there is not such a thing as the London Court of Justice, it is
important to named correctly the forum when drafting a clause.
A forum of selection clause is presumed valid; the burden of proof is on the party that claims
it is not valid or unfair.

Both parties did the correct thing by filling special appearancemotion to dismiss.
Anti suit injunction, if you dont have a forum clause.
You are looking for certainty, expertise and a neutral forum when drafting a forum clause.
Pp. 124 note 1synopsis of Bremen case. Arbitration clauses will be enforced.
Separated choice of law clause. Important.
Exclude other courts jurisdiction.
Pp.80 note 3.
Arbitration:
o Consensual process without agreement to arbitrate there is not obligation to arbitrate.
o Arbitration is a binding process, not as a negotiation, as soon as you get an award is
binding.
o Party autonomy as long is fair.
o Severability/seperability doctrine: there are two contracts (deal and arbitration),
severability doctrine if you have a problem in the first you can still go through
arbitration, but if the contract as a whole is vitiated is different?
o Finality: the courts cannot review an arbitration award; its final and binding.
There is no binding treaty of judgment recognition treaties with US and other countries. Why?
High amount of punitive damages. That does not mean that other countries will not recognize
a US decision.
Important:

Bremen Standard: A forum selection clause is enforceable unless the party wishing to sue in
violation of the clause demonstrated that trial in the agreed party wishing to sure in violation
of the clause demonstrates that trial in the agreed forum will be so manifestly and gravely
inconvenient that the party will be effectively deprived of a meaningful day in court, with 2
exceptions: (1) the clause is affected by fraud, undue influence, or overweening bargaining
power, or (2) enforcement would contravene a strong public policy of the forum.
Rule: The Bremen Standard: Forum selection clauses will always be enforced unless the
clause was affected by fraud, duress, or overweening bargaining power (overweening
limitation was effectively removed by Carnival Cruise Lines), or if it would result is bad public
policy. The respondent has a heavy burden of showing that enforcement of the forumselection clause would be unreasonable, unfair, or unjust. This case establishes a strong
presumption in favor of enforcing a derogation clause, if it is
o A freely negotiated agreement unaffected by duress, fraud, undue influence,
overweening bargain power.
o Not so inconvenient as to deprive plaintiff of a meaningful day in court.

Not a violation of strong public policy of the US forum where suit is brought.

Carnival Cruise Lines: Mitigating the overweening bargaining power prong of the Brennan
Clause. (Contract of Adhesion).
Ambiguity: The choice of forum clause should be clear that the parties are promising to sue in
the selected forum and nowhere else. In case of ambiguity, an American court will not
interpret consent to jurisdiction (prorogation clause) as a promise not to sue elsewhere
(derogation clause).

New York ConventionUnited Nations Convention on the Recognition and Enforcement of

Foreign Arbitral Awards.

Enforcement of the agreement clause to arbitrate. Courts are obligated to send the dispute
to arbitration. (This class will focused on this)
Enforcement and recognition of the arbitration award. Courts have to validate and enforce
arbitration awards.

Article 1. Parties that have signed the treaty. Even if there is not agreement between the parties, if
one of the parties suit the other party, the courts of that state are obligated to send them to
arbitration. ?
Article 2. (3).
Article 3-6: enforce the award unless article 5.
In the United States a four prons test is apply to determine if there is jurisdiction under the NY
Convention:
Non-us party or foreign transaction.
Commercial matter.
The award issued in the territory of one of the signatory of the NYC.
There must be an agreement in written to arbitrate the subject of the dispute. [Scope
question]
Arbitration clauses are: Broad v. Narrow.
Arising under this contract = narrow. (Tort, statutory claims are not under this clause) who to
make broader? Adding in relation to, relating to
United States Code Annotated (USCA)Title 9 Arbitration.
Section 3. Stay (stop) of proceedings where issue therein referable to arbitration.
Section 4. Failure to arbitrate under agreement; petition to US courts to order to compel arbitration,
notice and service thereof hearing and determination.
Section 205. Removal of cases form State courts.
Section 208.

NYC- 4-prong test.

Art. II n.3.
Cite FAA (section 3- motion to stay, section 4- motion compel, and section 208)

Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, (1995).

Arbitration doesnt lessen your substantial liability.

The Court will enforce the arbitration clause, but keep a string attached.
A court in the US need not recognize a judgment of the court of a foreign nation if it is against
public policy.
Professors opinion is that it could have been better-decided applying NY convention look at
pp.84 court shall send parties to arbitration unless the clause is null or void.

Pp.103 bottom. The only question to decide is whether or not the arbitration clause is
enforceable.

Buckeye Check Cashing, Inc. v. Cardegna, (2006)

The challenge to the validity of a contract as a whole, and not specifically to the arbitration clause,
must go to the arbitrator.
Theory of severability, the arbitration agreement must be treated as a distinct agreement
and can be void or voidable only on grounds, which relate directly to the arbitration
agreement.
Does the NY Convention can be applied retroactively?
Enforcement of arbitration agreement, confirmation of arbitral awards and execution of
judgments base on those confirmations shall not be refused on the basis of Act of State
Doctrine.
Notes:
When you have a broad arbitration clause court says that they will just consider any attack
directly related to the arbitration clause.
An attack to the arbitration clause by itself is in the court to decide.
Void or voidable not difference.
If the claim if over the contract as a whole (formation or invalidation) it will go to arbitration.
Footnote 1 pp.107 whether or not the severability doctrine will apply when the contract is
invalid not on the formation?
Mitsubishi Motors Corporation v. Soler Chrysler-Plymouth, Inc., (1985)
Facts: there is an arbitration clause in the agreement between the parties. Soler is having problems
selling the cars and wants to send them to USA (Boston) and South America. Mitsubishi did not allow
it, refusing to send the ordered vehicles and parts (heater, defoggers). Soler claimed that Mitsubishi
is conspiring and claim an anti-trust issue.

An agreement to arbitrate as a form of forum selection and suggested that any limitations on
forum selection agreements stated in Bremen would apply to arbitration.

The strong presumption in favor of freely negotiated contractual choice-of-forum provisions is

reinforced here by the federal policy in favor of arbitral dispute resolution, a policy that applies with
special force in the field of international commerce.
The potential complexity of antitrust matters does not suffice to ward off arbitration; nor does an
arbitration panel pose too great a danger of innate hostility to the constraints on business conduct
that antitrust law imposes. The importance of the private damages remedy in enforcing the regime of
antitrust laws does not compel the conclusion that such remedy may not be sought outside an
American court.
Why court validated arbitration clause?
Arbitrator will be bound to apply the American anti-trust law.
If the arbitrators in Japan ignored the law, US will have a chance to look at it one more time.
Pp. 114 115

Public Policy: Respondent's antitrust claims can be arbitrated pursuant to the Arbitration Act.
Concerns of international comity, respect for the capacities of foreign and transnational
tribunals, and sensitivity to the need of the international commercial system for predictability
in the resolution of disputes, all require enforcement of the arbitration clause in question,
even assuming that a contrary result would be forthcoming in a domestic context.
How can the arbitrators ignore the choice of law stipulated by the parties? Supreme Ct. says if
US law is not used, it will not be enforced in the US. This would not make Soler immune from
collection outside the US necessarily. The arbitrators are ignoring the choice of law clause. To

the extent they are awarding damages for antitrust violations, they are awarding punitive
damages, treble damages. Such damages are particularly troubling outside of the US since
many other countries find such damages to be contrary to public policy.
Post-Mitsubishi has seen an extension to many other areas of law, including antitrust and
domestic cases.

Notes:
Pp. 120 notes. (Clauses that court found that claim were out of their scope).
o Arising out of: do no cover torts.
o Arising under v. arising out of:
Pp. 88 arbitration clause.
Arbitration is greatly accepted by US courts, unless the parties show that the clause is
affected by fraud, undue influence or overweening bargaining power or enforcement would
contravene a strong public policy of the forum.
Important: three cannons of construction:
o Liberal federal policy favoring arbitration agreements.
o The arbitration act establishes that, as a matter of federal law, any doubts concerning
the scope of arbitrable issues should be resolved in favor of arbitration.
o Federal policy applies with special force in the field of international commerce.
Rhone Mediterranee Compagnia Francese v. Lauro, (1983).
Mere Technicality-- Even if an arbitration award pursuant to an agreement is unenforceable in a
foreign nation (for example, if the arbitration clause requires an even number of arbitrators which
violates the foreign nation's law), the arbitration award can be enforced outside of that nation under
the Convention on Recognition and Enforcement of Foreign Arbitral Awards (CREFAA) since the new
forum court could disregard procedural defect.
Under Convention on Recognition and Enforcement of Foreign Arbitral Awards, agreement to arbitrate
is "null and void" only when it is subject to internationally recognized defense such as duress,
mistake, fraud or waiver, or when it contravenes fundamental policies of forum state; "null and void"
language must be read narrowly, for signatory nations have jointly declared general policy of
enforceability of agreements to arbitrate. -- The court decided base on the Bremen standard.
Important:
The sit of arbitration is very important.
Real world Case: Texco had an agreement with a German company called Germco, which has an
arbitration clause any claim arising under this contract send to---arbitration. Texco sues in USDCT
and claims $1M for work performed.

First motion to stay and compel arbitration under the Federal Foreign Arbitration Act (9USC S3
and 4) since this are applicable because section 208.
NYC, art II, 3. Four prong test.
Does it make a difference if arbitration has commence or not by the other party? It makes
not different, court is obligated to refer the parties to arbitration under the article II of the
NYC, and stop the lawsuit under FFAA section 3.

The right way: you first invoke the international treaty (NYC) follow by the FFAA.

Does it make any difference if Texco is claiming anti-trust and conspiracy? We are in front of
a narrow clause, and conspiracy is consider a tort, which is not within the scope of the clause.
What about if the clause is any claims in connection with this contract---arbitration? Are
anti-trust and conspiracy claims within its scope? You can cite the three cannons and assert
that we are in front of an ambiguous clause. Also, in front of ambiguity you favor arbitration.
Important to cite the 4-prong test.
o NYC article 2, P1 agreement shall be in writing.

Lets assume that we have a broad arbitration clause arising out of or relating to, and that
the contract is void under European law what would you say to hold the arbitration clause?
Severability doctrine. (US will apply arbitration law in determining this issue).

Section 3. Enjoining Suit Abroad.

We also had the chance to see anti-suit injunction in Bremen.
Quaak v. Klynveld Peat Marwick Goerdeler, (2004).
Facts: plaintiff asked KPMG to show a document, KPMG refused to show documents claiming that it
was illegal under Belgium law. Court issued an order to produce. KPMG sough for protection in
Belgium courts. Plaintiff requested an anti-suit injunction to prevent KPMG proceed in Belgium court.
Court issued an anti-suit injunction. Defendant appalled.
This case discusses the scenario when an American court wants to enjoin a foreign court from
interfering with its proceedings; an anti-suit injunction. In this case, the Belgian defendant wanted
to have the Belgian court impose penalties on those who wanted to effectuate discovery of
documents in Belgium. The court adopts a modified conservative approach, which highlights the
importance of international comity. You must first ask whether the parallel suits involve the same
parties and issues. If so, then you do a balancing test.
Holding and Reasoning: The anti-suit injunction is upheld. Several factors go towards the securities
fraud plaintiffs. First, they already know there are relevant documents. Second, the Belgian
defendant has unclean hands; they are under criminal investigation for fraud in Belgium. Third, they
did business in America and should expect its courts to have jurisdiction over them, and expect
American style discovery.
Important:
Liberal view anti-suit injunction: only ask if it is the same party and issue, if so, you can enjoin
to effectuate American court proceeding
Conservative view anti-suit injunction: Only enjoin if forum court imperil the jurisdiction of the
forum court or national policy is threatened.
Parallel proceeding rule: allow suits to go forward in all forums, all courts recognize the first
judgment reached. This is more in line with the conservative view.
Parallel Proceeding is a rebuttable presumption. One can use the following factors in order
to turn the parallel proceeding into a interdictory suit (this is not an exclusive list):
o The nature of the two actions.
o The posture of the proceedings in the two countries.
o The conduct of the parties (their good faith or lack thereof).
o The importance of the policies at stake in the litigation.
o The extent to which the foreign action has the potential to undermine the forum
courts ability to reach a just and speedy result.
Notes from class:
The court has unquestionable authority to issue the anti-suit injunction because the court is
dealing with a party subject to recourse personal jurisdiction.
This is very important because the issue of an anti-suit injunction indirectly affect the
jurisdiction of a foreign court.
Example of parallel proceeding rule: If you an action 1 (in US court) and action 2 (in English
court), means that both courts can proceed with the action, you cannot interfere with the
jurisdiction of other court (no anti-suit injunction), if one of the courts issue a judgment the
other court have to stop and recognize the first court judgment, like a race. (It has to be
same parties and same issue)this is more a conservative approach.
Enjoin means enjoin the party to proceed in other court not the enjoining the court.
Look at page 132-133 to see Texas view in Gannon v. Payne. First file action court can stop the
second action. (That is in local context)

5th circuit has a liberal view of anti-suit injunction and also accepts the stream of commerce to
establish jurisdiction. (No Texas courts)
How to get out of these problems? Forum selection clause.
Principle of comity: respect for other nation.

Section 4. Service of Process.

How do you properly serve the defendant? The mere fact that you have been served that does not
mean that there is jurisdiction (GOTCHA jurisdiction exception).
If service is not fulfilled, case will be dismissed (rule 12 federal procedural rules).
The time bar running.
To remove the case from federal to state court, the time start running after serving.
Defendants options:
Special appearance.
Answer the merits.
Do nothing. What happen?
Default judgment. Collateral attack: personal jurisdiction or no valid service of process.
The Hague Service Convention
Objectives of the Service ConventionThe Convention establishes uniform guidelines on how a
party can go about serving a foreign Defendant in a nation that is a signatory to the convention. The
Service Convention produced a form that a party can complete in order to order service of process on
a party. It ensures that parties are afforded enough time to respond to service of process and that he
would have notice and an opportunity to be heard.
Federal Rule of Civil Procedure 4(f).
Service Upon Individuals in a Foreign Country. This rule outlines the procedure for effecting
service abroad.
"Unless otherwise provided by federal law, service upon an individual from whom a waiver has not
been obtained and filed, other than an infant or an incompetent person, may be effected in a place
not within any judicial district of the U.S.:
1. By any internationally agreed means reasonably calculated to give notice, such as those
means authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial
Documents; or
2. If there is no internationally agreed means of service or the applicable international
agreement allows other means of service, provided that service is reasonably calculated to
give notice:
a. In the manner prescribed by the law of the foreign country for service in that country in
an action in any of its courts of general jurisdiction; or
b. As directed by the foreign authority in response to a letter rogatory or letter of request;
or
c. Unless prohibited by the law of the foreign country, by:
Delivery to the individual personally of a copy of the summons and the complaint;
or
Any form of mail requiring a signed receipt, to be addressed and dispatched by the
clerk of the court to the party to be served; or
3. By other means not prohibited by international agreement as may be directed by the court."
(Emphasis added.)
Volkswagenwerk Aktiengesellschaft v. Schlunk, (1988).
This is the major case construing the Service Convention. Supremes say you must use the Hague
guidelines to issue service abroad for civil or commercial matters, where there is occasion to
transmit a judicial or extrajudicial document for service abroad. Prof. Hans Smit of Columbia
disagrees, who says the U.S. should recognize the convention but not to the exclusion of other
methods to issue service.

Held: The Hague Service Convention does not apply when process is served on a foreign corporation
by serving its domestic subsidiary, which, under state law, is the foreign corporation's involuntary
agent for service.
Held: Concurrence would add to: service on a domestic agent is valid and complete under both
state law and the Due Process Clause. That this service is reasonably calculated to reach the
parent in due time as the Convention requires.
Notes:
EU allows for postal service to be good enough. (Pp. 146, bottom).
International Laws Affect on Domestic Law. An act of Congress ought never to be construed
to violate the law of nations if any other possible construction remains.

When our government two political branches, acting together, contravene an international
legal norm, does a court have any authority to remedy the violation? The answer will be
no if the type of international obligation that the congress and president violate is either a
treaty or a rule of customary international law, but if the violation is over a peremptory norm,
the domestic legal consequences are unclear. The principles appellants characterize as
peremptory norms of international law are not recognize as such by the community of
nations. (Non of the claims that appellants derive from violation of international law can
succeed in this court)

Section 5. Taking of Evidence. Hague Evidence Convention: How applied, what countries have
adopted and with what reservations. Effect of blocking statutes on the taking of evidence abroad.
Effect on discovery in U.S. courts: whether to order discovery and appropriate sanctions if discovery
order is not obeyed. Discovery related to jurisdiction itself.
Situation when you have a third party in a foreign country, the court use the Hague
convention to request to a court in that country to compel a third party to show evidence.
When you have a party subject to the jurisdiction of the court, the other party may use the
Hague convention but is not obligated to do so.
The Hague Evidence Convention The Evidence Convention facilitates, but does not impose
mandates on signatory nations, obtaining evidence from abroad and makes it more likely that the
evidence will be "in the form needed by the court where the action is pending." The primary method
provided by the Convention for obtaining evidence from abroad is by "Letter of Request" to a central
authority (Ev.Conv.Art.1; in US districts, such letters are enforceable per 28 USC 1782(a)), which all
contracting nations are required to designate. (Ev.Conv.Art.2.) Unless a signatory nation objects
(Ev.Conv.Art.33) or refuses permission, (Ev.Conv.Arts.15-17) the Convention also permits taking of
evidence abroad by "a diplomatic officer or consular agent of a Contracting State," (Ev.Conv.Art.15)
or by "a person duly appointed as a commissioner for the purpose..."
Art 1: LETTERS OF REQUEST: The service convention says you shall follow it; the evidence convention
is not mandatory. The letter of request is from the court not from the interested party. That party
asks the court to issue the letter to request the evidence.
Art 2: Here, as in the other convention, there is also a central authority.
Art 3: Content of the letter of request.
Art 4: In the language of the place or in English or French unless state made a reservation on this
clause.
Art 9: The law of the place rules. But, a special procedure can be solicited. The judicial authority,
which executes a Letter of Request, shall apply its own law as to the methods and procedures to be
followed. However, it will follow a request of the requesting authority that a special method or
procedure be followed, unless this is incompatible with the internal law of the State of execution or is

impossible of performance by reason of its internal practice and procedure or by reason of practical
difficulties. A Letter of Request shall be executed expeditiously.
Art 23: A Contracting State may at the time of signature, ratification or accession, declare that it will
not execute Letters of Request issued for the purpose of obtaining pre-trial discovery of documents
as known in Common Law countries.
Art 27: The provisions of the present Convention shall not prevent a Contracting State from a)
declaring that Letters of Request may be transmitted to its judicial authorities through channels other
than those provided for in Article 2; b) permitting, by internal law or practice, any act provided for in
this Convention to be performed upon less restrictive conditions; c) permitting, by internal law or
practice, methods of taking evidence other than those provided for in this Convention.
Notes:
To what extend the court can impose sanctions?
What are the impacts of the Blocking Statues?
Societe Nationale Industrielle Aerospatiale v. United State District Court, (1987)
HEC (Hague Evidence Convention) nonexclusive, FRCP rules may be used for discovery abroad.
Whether or not the Evidence convention should apply and the court is obliged to enforce it or use
instead the federal rule of civil procedure and evidence. The defendant did not content the personal
jurisdiction.
HEC CASE IN FEDERAL COURT
HOLDING: HEC in not exclusive method of conducting discovery of evidence in a foreign jurors
but a supplement on state and federal law, in other words, the federal courts are free to use
FRCP and federal discovery rules.
Preamble does not speak in mandatory terms.
Looking at Art 23 why would common law countries agree to HEC when most non-common
law countries would simply opt out of pretrial discovery (while the common law countries that
did not opt, i.e. USA, would be under the unilateral burden of liberal discovery for foreign
litigants who seek it).
Art 27 clearly states that Hague Evidence Convention would not prevent more liberal
discovery methods.
Dicta: Court should consider comity and undue burden on D concerns but does not state a specific
test.
Facts: Two French aircraft manufacturers are being sued in USA, they say that Hague Evidence
Convention must be the exclusive law followed for discovery conducted in France.

Post-Aerospatiale cases general place burden on foreign defendant to prove under aero case
or some comity test that Hague Evidence Convention should apply.
If the parties are already before the court, then the court does not have to use Hague. Its a
good way to get information from a third party. Hague is just a supplement; you can use the
other methods.
Blocking Statute does not divest a court of power it already has.

Held: 1. The Convention does not provide exclusive or mandatory procedures for obtaining
documents and information located in a foreign signatory's territory. The Convention's plain
language, as well as the history of its proposal and ratification by the U.S., unambiguously supports
the conclusion that it was intended to establish optional procedures for obtaining evidence abroad.
Its preamble speaks in no mandatory terms (may v. shall), specifying its purpose to "facilitate"
discovery and to "improve mutual judicial co-operation." Similarly, its text uses permissive language,
and does not expressly modify the law of contracting states or require them to use the specified
procedures or change their own procedures. The Convention does not deprive the District Court of
its jurisdiction to order, under the Federal Rules, a foreign national party to produce evidence
physically located within a signatory nation. 2. The Court of Appeals erred in concluding that the

Convention "does not apply" to discovery sought from a foreign litigant that is subject to an
American court's jurisdiction. Although they are not mandatory, the Convention's procedures are
available whenever they will facilitate the gathering of evidence, and "apply" in the sense that they
are one method of seeking evidence that a court may elect to employ. 3. International comity does
not require in all instances that American litigants first resort to Convention procedures before
initiating discovery under the Federal Rules. In many situations, Convention procedures would be
unduly time consuming and expensive, and less likely to produce needed evidence than direct use of
the Federal Rules. The concept of comity requires in this context a more particularized analysis of
the respective interests of the foreign and requesting nations than a blanket "first resort" rule would
generate.
FOR BLOKING STATUTES! (Note 29 on the Aerospatiale Case)
Restatement (Third) of For Rel. Law. 442. Requests for Disclosure: Law of the U.S.,
(1986)
1.
A court or agency in the U.S., when authorized by statute or rule of court, may order a person
subject to its jurisdiction to produce documents, objects, or other information relevant to an
action or investigation, even if the information or the person in possession of the information
is outside the U.S.
Failure to comply with an order to produce information may subject the person to whom the
order is directed to sanctions, including finding of contempt, dismissal of a claim or defense,
or default judgment, or may lead to a determination that the facts to which the order was
addressed are as asserted by the opposing party.
In deciding whether to issue an order directing production of information located abroad, and
in framing such an order, a court or agency in the U.S. should take into account the
importance to the investigation or litigation of the documents or other information requested;
the degree of specificity of the request; whether the information originated in the U.S.; the
availability of alternative means of securing the information; and the extent to which
noncompliance with the request would undermine important interests of the U.S., or
compliance with the request would undermine important interests of the state where the
information is located.
2. If disclosure of information located outside the U.S. is prohibited by a law, regulation, or order of a
court or other authority of the state in which the information or prospective witness is located, or of
the state of which a prospective witness is a national:
A court or agency in the U.S. may require the person to whom the order is directed to make a
good faith effort to secure permission from the foreign authorities to make the information
available;
A court or agency should not ordinarily impose sanctions of contempt, dismissal, or default on
a party that has failed to comply with the order for production, except in cases of deliberate
concealment or removal of information or of failure to make a good faith effort in accordance
with paragraph (a);
A court or agency may, in appropriate cases, make findings of fact adverse to a party that has
failed to comply with the order for production, even if that party has made a good faith effort
to secure permission from the foreign authorities to make the information available and that
effort has been unsuccessful.
Societe Internationale Pour Participations Industrielles et Commerciales, S.A. v. Rogers.,
(1958).
Facts: In a suit under 9(a) of the Trading with the Enemy Act brought by petitioner, a Swiss holding
company, for the return of property seized by the Alien Property Custodian under 5(b), the District
Court ordered petitioner to produce certain records of petitioner's Swiss bank. The Court found the
records to be relevant and to be within petitioner's "control," within the meaning of Rule 34 of the
Federal Rules of Civil Procedure. The records were not produced, on the grounds that their production
would violate Swiss penal laws and that an order prohibiting their production had been made by the
Swiss Federal Attorney. The District Court ruled that, unless full production were made, the complaint
would be dismissed. During further lengthy proceedings, petitioner produced over 190,000

documents, but was unable fully to satisfy the Court's order. The District Court found that petitioner
had shown good faith in its efforts to comply with the production order, but it concluded that, apart
from Swiss law, petitioner had control over its bank's records, that such records might prove to be
crucial in the outcome of the litigation, and that Swiss law did not furnish an adequate excuse for
failure to produce them. Accordingly, it dismissed the complaint with prejudice. The Court of Appeals
affirmed.
Holding: on the record, dismissal of the complaint with prejudice was not justified; the judgment is
reversed; and the cause is remanded for further proceedings.
Rule 37 of the FRCP: If any party refuses to obey an order to produce a document, the court may
dismiss the action.
Holding: Rule 37 will not authorize dismissal when noncompliance is due to inability, instead of bad
faith or fault.
Notes:

Two issues here, one within the power of the court.

Does the American court have jurisdiction? Yes. It properly exercises it?
U.S Supreme Court usually does not give relevant importance to Blocking Statutes.
The adverse inference- shift burden of proof. (Pp. 182 bottom page look at note 1)
The district court, Appellate court do have jurisdiction to order production of documents in a
forum jurisdiction even if there is foreign legislation prohibiting it.
In what stage of the procedure these blocking statues come into play? Next case.

In re Uranium Antitrust Litigation (1979): Used to Enforce Production Balancing Test in whether
to issue Production Orders:
1. The importance of the policies underlying the US Statute which forms the basis for the
plaintiffs claims;
2. The importance of the documents to those claims; and
3. The degree of flexibility of the foreign nations application of nondisclosure law.
Rule: Jurisdiction of American courts is unquestioned when they order their own nationals to produce
documents located within this country, but jurisdiction is less certain when American courts order a
to produce documents located abroad, especially when the country in which the documents are
situated prohibits their disclosure. Fed. Rules Civ. Proc. Rule 37
In antitrust suit alleging the existence of an international marketing arrangement among uranium
producers, the parties filed discovery demands for documents located in foreign countries.
The District Court, Marshall, J., held, inter alia, that with certain exceptions regarding two s, the
district court had the power to issue a production order against the resisting s that were the
subjects of s' discovery motions, since those s were shown to be within the court's personal
jurisdiction and to have control over the requested documents; furthermore, it was appropriate for
the court to exercise its discretionary power to issue production orders, upon a weighing of the three
factors enunciated by the Supreme Court in its Societe opinion.
Nature and authority in general.
In the field of foreign relations law, two types of jurisdiction have been defined:
Prescriptive jurisdiction--refers to the capacity of a state under international law to make a
rule of law, and it is exemplified by the enactment of the Federal Rules of Civil Procedure, e.
g., Rule 37;
Enforcement jurisdiction--refers to the capacity of a state under international law to enforce a
rule of law. Fed. Rules Civ. Proc. Rule 37.
Discovery and Production of Documents and Other Tangible Things: Proceedings: Order

When a court enters an order compelling production of documents under Rule 37, it exercises its
enforcement jurisdiction. Fed. Rules Civ. Proc. Rule 37, 28 U.S.C.A.
Notes:
There is a two-prong test:
1. Jurisdiction of the court.
2. The capacity to enforce a rule of law.
Pp. 189 court ordered the documents to be produced (bottom of paragraph 2).
Foreign legislation cannot undermine the courts power when it has jurisdiction.
U. S. v. First National Bank of Chicago, (1983).
Counter to the Uranium Case: Used to not enforce production. Balancing test was performed by the
District Court in which it held that the interest of First Chicago not to subject its employees to
potentially severe Greek criminal penalties outweighed the interest of the IRS from being able to
summons disclosure of the exact amount of a bank account for clients of the bank who reside in
Greece.
Appeal was taken from a decision of the U.S. District Court for the Northern District of Illinois, John
Powers Crowley, J., granting enforcement of an Internal Revenue Service summons. The Court of
Appeals, Fairchild, Senior Circuit Judge, held that:
The bank established that compliance with the summons would subject its employees to risk of
substantial criminal penalties under Greek law, and, further, a balancing of the relevant competing
interests weighed against compelling disclosure.
Note: The Bank is a third party and is not subject to the Hague convention.
Subjects of Expert Testimony: Laws of other States or Countries
Sworn statement by attorney is not prerequisite to proving foreign law when issue concerning law of
a foreign country arises. Fed. Rules Civ. Proc. Rule 44.1, 28
In determining whether Internal Revenue Service summons would be enforced, district court could
consider letter, affidavits and translations provided by bank on issue of whether disclosure of
information sought would subject bank's employees to criminal penalties in Greece, even if there
were no sworn statement by taxpayer's Greek counsel. Fed. Rules Civ. Proc. Rule 44.1
Rule: When a party attempts to compel disclosure of statements or documents abroad, a district
court may perform a balancing test as to the relative value of the discovery to the party versus the
interests of the foreign party, even in the absence of a sworn statement by foreign partys counsel as
to authenticity of materials upon which the court relies in performing its balancing test.
Notes:
One of the sanctions that the court can do if documents wont be produced that would go
towards proving personal jurisdiction is the shift the burden so that the defendant has to
prove that they dont have personal jurisdiction (note 3).
The courts try to put a sense of fairness when requesting evidence. All depend on the factsIn Re Asbestos Insurance Coverage Cases, (1985) House of Lords.
Production of Documents
Issue: is the request for documentation specific so that they can be produced? HOL says no.
Rule: discovery request must give specific indication that the would have possession, and thus,
would be able to produce them.
Weintraubs Rule

Rule: Dont try to become an instant expert on requesting documents during discovery from a in
England and on Englands interpretation of Article 23. Hire local council.
Notes:
Here is a case when the court request evidence from a third party that is not subject to the
courts jurisdiction.
UK invoked Article 23, involving the production of documents during pretrial discovery. One of
literally hundreds of cases involving substantially the same interests in which American
companies sought insurance and reinsurance from foreign, including UK, underwriters. This
case is a suit against one of the UK reinsurance companies involving a claim for
indemnification. Court of Appeal permitted discovery of some of the documents requested,
and ordered the insurance agent to submit to depositions. House of Lords reverses on count
of allowing discovery of some of the documents, but does compel deposition. Discovery of
documents was precluded due to the requests not being specific enough, i.e. no specific
indication that the would have possession of the documents and would be able to produce
it.
American court does not have jurisdiction over this insurance companies in England, court
through a letter of request to request the foreign court to compel these companies to produce
evidence (document and testimony). (Both signatory of the Hague Convention).
England claims that they will show documents: particular documents and that actually
exist (pp. 196 bottom). England said no.
Depending on the jurisdiction you are getting assistance could be very difficult to get
evidence.
Rogerss case: death penalty not use!
Paradigms:
1. When defendant is not subject to the American jurisdiction (non party), court can use Hague
Convention in order to get the needed documents by requesting assistance from the court
where the non-party is located. (Asbestos case)
2. Dealing with a defendant that is subject to the jurisdiction of the court and it has access to
the documents; American court can compel to show documents (directly) and American court
can sanction that party if it does not compel (failure to produce) (shift burden, adverse
inference). (Aeroespatiale, Uranium, Rogers)(It does not matter that there is foreign law
(blocking statue) prohibiting such showing). Hague convention in this case is just an option,
but it takes more time and makes everything more complicated.
Notes:
Service convention is a must obligatory not the evidence, this is optional (it says you
MAY).
Once the court has determined that that person is party, it can order disclosure of evidence.
Adverse inference doctrine: if a party fails or refuses to produce evidence that they hold, the
court may assume or infer that those documents will bring adverse information to that party.
E-mail Notes:
Please review note 3, at page 193 of the case book. We have discussed the drawing of adverse
inferences based upon the failure or refusal to provide requested information. Another tool available
to the court is to shift the burden of proof on a given issue to the party failing to comply with the
courts discovery orders. Professor Weintraub refers to the decision in Insurance Corp. of Ireland,
Ltd. v. Compagnie des Bauxites de Guinee in which the defendants moved to dismiss the case for
lack of personal jurisdiction but refused to obey the courts discovery orders on the jurisdictional
issue. As a sanction for disobedience, the court shifted the burden of proof on the jurisdictional issue
from the plaintiff to the defendants.
We will begin our next class with consideration of Professor Weintraubs question: What act of the
defendants made it fair and reasonable to compel discovery on the jurisdictional issue when it had
not been decided that the defendants had the requisite contacts with the forum for personal
jurisdiction?

In formulating your answer to the question, consider the options available to the foreign defendant in
response to a lawsuit filed against it in a U.S. court.

What are the options for a foreign defendant when suit in a U.S court?
o Objection to personal jurisdiction special appearance (advantage and disadvantage:
there is not interlocutory appeal for an order denying it, you answer and defend all the
merits).
o Two steps process:
1. File suit in foreign jurisdiction-------------Race to judgment.
2. Additional option: seek an anti-suit injunction for the foreign jurisdiction (to stop
proceedings)
o Do nothing, leading to default judgment. ---------Go to collaterally attack (defense
mechanism) collateral attack because the attack will occur in a different court in
grounds of personal jurisdiction. (This only works if all your money is outside the U.S
and absolute assurance that there is not personal jurisdiction). What happen is suit is
brought to Texas and there is money in CA? Note: full faith and credit.
o General Appearance: answer/defend on merits.

Note: court shift burden of proof based on the defendant action to bring motion to dismiss for
personal jurisdiction without merits.
Chapter 2.
Suits by Foreign Plaintiffs. (Lawsuit bring by foreign plaintiff)
Section 1. Forum Shopping and Forum Non-Conveniens.
Piper Aircraft v. Reyno, (1981).
Summary: Following an airplane crash in Scotland that killed 6 people, a legal secretary followed a
products liability suit in California against the airplanes manufacturer. The manufacturer moved to
dismiss the suit on grounds of forum non-conveniens.
Rule of Law: The possibility of change in substantive law should not be given conclusive or even
substantial weight in a forum non-conveniens inquiry.
Facts: In 1976 a small commercial aircraft crashed in the Scottish highlands. The pilot and five
passengers, all Scottish subjects and residents, were killed. The heirs and next of kin of all 6 victims
were all also Scottish. The aircraft was manufactured in Pennsylvania by petitioner Piper Aircraft Co.
The aircraft was owned and operated by a Scottish air taxi service. In July 1977 a California probate
court appointed Defendant Gaynell Reyno administratrix of the estates of the five passengers
Defendant was not related to any of the passengers; she was merely the legal secretary to the
attorney who filed this lawsuit. Several days after her appointment, Defendant commenced separate
wrongful death actions against Plaintiffs Piper and Hartzell in California superior court claiming
negligence and strict liability. Defendant admitted that suit was filed in the U.S., as opposed to
Scotland, because of its more favorable laws regarding liability and damages. Plaintiffs first removed
to federal court in California, and then successfully sought transfer to the Middle District of
Pennsylvania, where Plaintiff does business. They then sought to dismiss the case on grounds of
forum non-conveniens.
Issue: Whether a change in substantive law between venues is a sufficient reason for denying a
motion to dismiss on grounds of forum non-conveniens. What is the standard of review of a trial
courts ruling on a motion to dismiss via forum non-conveniens?
Held: The Court of Appeals erred in holding that plaintiffs may defeat a motion to dismiss on the
ground of forum non conveniens merely by showing that the substantive law that would be applied in
the alternate forum is less favorable to the plaintiffs than that of the present forum. The possibility of
change in substantive law should not be given conclusive or even substantial weight in the forum
non-conveniens inquiry. A plaintiffs choice of forum is given greater weight when the plaintiff has
chosen the home forum. The forum non-conveniens determination is committed to the sound

discretion of the trial court, and may be overturned only when there has been a clear abuse of
discretion.
Discussion: Although the Supreme Court of the United States rejected the argument that the motion
to dismiss should be denied because the law in other forums would be less favorable to the plaintiff,
it did however acknowledge that if the alternative forum was so clearly inadequate that it would offer
no remedy at all, then the change in substantive law might be grounds for denying the motion. In
ruling that the district court did not abuse its discretion in granting the motion, the Supreme Court
noted Scotlands strong interest in the litigation, since all the victims were Scottish residents, coupled
with the fact that holding the trial in Pennsylvania would make it impossible for Plaintiff to interplead
third party defendants residing in Scotland. Thus the district court correctly held that public policy
favored holding the trial in Scotland.
Notes:
It must be an adequate alternative forum in order to dismiss the case in forum nonconvenience.
The fact that you will recover more money is not enough if the political facts are stronger.
The fact that you have more favorable laws is not enough.
The plaintiff is not entitled in all cases to choose forum (there are private and public factor
that affect this).
The court thought that it was not fair to sit the propeller company and the airplane owner
sitting by themselves in court without access to other possible defendants (maintenance).
Why plaintiff did not joint them in the same lawsuit? Personal jurisdiction issues (all linked to
UK).
Conditions imposed: (note 10 pp. 225).
What do you need to present (documents): affidavits, or any other document dealing with the
specific transaction. Public and private factors to determine if the forum is convenience or
not.
Bremen case.
Forum non-convenience is not a special appearance meaning that the action does not stop
and defendant still needs to answer on the merits.
Condition of waiver of statue of limitations.
It is better to present the special appearance in personal jurisdiction and additionally
present forum non-convenience.
What happen if the court denied the forum non-convenience? Options? Can defendant
appeal? NO, since is not a final order. ---- Case goes to trial; if defendant loses the chances to
go to trial again in bases of forum non-convenience are very low. Options: file an anti-suit
injunction in Scotland, and make Scotland courts to stop plaintiffs to pursue action in US.
Harrison v. Wyeth Laboratories Division of American Home Products Corp, (1982).
Summary: Plaintiffs in this action are all citizens and residents of the UK. They each allege that they
purchased oral contraceptive within the UK, used them in accordance with the directions and
instructions, and as direct and proximate result of usage suffered injury, damages, and death. Before
the court is defendants motion to dismiss on grounds of forum non-conveniens. For the reasons to
follow, the motion is granted, subject to the defendants agreement to the conditions specified in
memorandum.
Facts: US lawsuit id brought in Pennsylvania court against AHPC who owns in UK a British company
called JWB. JWB sells contraceptive to be used within UK territory.
Holding and Reasoning: Granted. UK has a greater interest in resolving the dispute. Also, UKs law will
be applied. Motion was conditioned to defendant must agreed to submit to UK courts jurisdiction and
provide evidence as well as testimonies, and it must pay any judgment rendered. The court
establishes three conditions: (1) evidence must be available to plaintiff; (2) defendant must agree to
make available at its own expense, any document, witnesses or other evidence; (3) defendant must
agree to pay any judgment so rendered. The court though that a suit against subsidiary (JWB)
would not be enough to constitute an adequate alternative forum.

Notes:
In this case we can see the imposition of conditions.
Would it make any different if product were manufacture in PA? Probably not.
Look at question in the note at the bottom of page 230.
In re Union Carbide Corporation Gas Plant Disaster at Bhopal, India (1987).
Facts:
Holding and Reasoning: motion to dismiss granted and affirmed. Indian courts posses a greater
interest in resolving the matter. Also, all evidences, witnesses and documents are in India. The
district court initially imposed four conditions: (1) consent to the jurisdiction of the courts of India and
continue to waive defenses based on the statue of limitations; (2) agree to satisfy any judgment
rendered by an India court against it and upheld on appeal, provided the judgment and affirmance
comport with the minimal requirements of due process; and (3) be subject to discovery under the
Federal Rules of Civil Procedure of the United States. The appellate court strikes two of those
conditions finding those conditions unnecessary, and unfair.
Notes:
P.230 question: union carbide imposed
Lubbe v. Cape PLC, (2000)
Summary: Tort case.
Facts: Mr. Lubbe was injured at work while manufacturing asbestos for a South African subsidiary
company of the UK parent company, Cape plc. The South African subsidiary had no money left and
Cape Plc. had no assets in South Africa. His case was one of 3000 claims. The case was initiated in
the high court in London. He alleged that the parent, Cape Plc., owed a direct duty of care in tort to
him as a worker in the company group. Cape Plc. was applying to stay the actions on the basis of
forum non-conveniens, submitting that they were an abuse of process on grounds that intention to
launch a multi party action was not disclosed to the court. Mr. Lubbe argued that the claims should
not be stayed since, in South Africa, the legal aid necessary to continue the claim had been
withdrawn, no contingency fee arrangement was available and no other source of funding would be
available. The Court of Appeal refused Mr. Lubbe's arguments and continued the stay, and Mr. Lubbe
appealed to the House of Lords.
Holding and Reasoning: The House of Lords held unanimously that although South Africa was the
more appropriate forum for hearing the claim, it was highly likely that legal representation for the
claimants would be unavailable. The expert evidence suggested a denial of justice would result,
exacerbated by the lack of procedures in South Africa to accommodate multi-party actions. This
meant that lifting the stay was appropriate and the action continued in the English courts. Lord
Bingham made the following remark about the tort issue: the issues in the present cases fall into two
segments. The first segment concerns the responsibility of the defendant as a parent company for
ensuring the observance of proper standards of health and safety by its overseas subsidiaries.
Resolution of this issue will be likely to involve an inquiry into what part the defendant played in
controlling the operations of the group, what its directors and employees knew or ought to have
known, what action was taken and not taken, whether the defendant owed a duty of care to
employees of group companies overseas and whether, if so, that duty was broken. Much of the
evidence material to this inquiry would, in the ordinary way, be documentary and much of it would
be found in the offices of the parent company, including minutes of meetings, reports by directors
and employees on visits overseas and correspondence. The second segment of the cases involves
the personal injury issues relevant to each individual: diagnosis, prognosis, causation (including the
contribution made to a plaintiff's condition by any sources of contamination for which the defendant
was not responsible) and special damage. Investigation of these issues would necessarily involve the
evidence and medical examination of each plaintiff and an inquiry into the conditions in which that
plaintiff worked or lived and the period for which he did so. Where the claim is made on behalf of a
deceased person the inquiry would be essentially the same, although probably more difficult. On a
side issue, however, matters of public interest and policy were not relevant to determining which
forum was best, and only private interests would be taken into account.

Notes:
Even when South Africa was the most convenient forum, there was a lack of procedures in
South Africa to provide plaintiffs with an appropriate forum.
Look at note #3. In U.S you need to look at both public a private factors.
Section 2. Erie, Reverse Erie and Litigation Strategy.
Erie: the U.S Federal courts has jurisdiction under federal statues, federal questions. Federal courts
have diversity jurisdiction. When a Federal court is sitting in diversity case what law would apply?
The court will apply the substantive law in which is sitting, and the federal procedural law. Meaning
that the court will decide the forum non-convenien based in federal procedural law.
Smith Kline & French Laboratories Ltd v. Bloch, (1983)
Facts: he first plaintiffs (the English company) were a pharmaceutical company in England and were
a wholly-owned subsidiary of the second plaintiffs (the US company), a multinational corporation
based in Pennsylvania. The defendant was a research worker resident in England. In 1974, by a
written agreement made in England, the defendant granted the English company the sole license to
develop and market a drug which he had invented. Under the terms of the agreement the English
company had exclusive responsibility for registration and marketing of the drug and also the right to
terminate the agreement if they decided not to proceed with the drug's further development. In 1975
the defendant was appointed a consultant to the English company. Clinical trials of the drug were
subsequently carried out in hospitals throughout the United Kingdom under the defendant's
supervision. In 1976 it was decided that the drug should not be developed any further and as a result
the defendant left the English company's employment. In 1980 the English company terminated the
licensing agreement with the defendant. The defendant brought an action for damages in
Pennsylvania against both the English company and the US company contending, inter alia, (i) that
the English company were in breach of contract for which the US company, as the principal in his
contract with the English subsidiary, were liable, (ii) that the US company and the English company
had been guilty of false representation in saying that they intended to market the defendant's drug
whereas they intended to keep it out of the market so that it would not compete with their own
products, (iii) alternatively that the US company had improperly interfered with the contract between
the English subsidiary and the defendant, and (iv) that the US company and the English company
had intentionally inflicted emotional distress on the defendant. The English company sought an
injunction in the English court to restrain the defendant from further proceeding with his claim in
Pennsylvania or from making any further claims outside the jurisdiction of the English court and
further sought declarations that the proper law of the agreement was that of England and that the
English company were not liable for the breaches complained of. In the course of the hearing in
England, the US Company was joined as plaintiffs to the action. The defendant contended that
Pennsylvania was the natural forum for the action because of the overriding involvement of the US
company and that if the injunction was granted he would be deprived of legitimate juridical
advantages, namely (a) the contingency fee basis of remuneration in the United States, under which
payment of legal fees was contingent on his action being successful, (b) the practice in the United
States of awarding higher damages and also damages for mental distress, (c) the availability of trial
by jury and (d) the fuller discovery procedures in Pennsylvania. He further contended that the English
court should not restrain a litigant in foreign proceedings unless it could be shown that those
proceedings themselves were in breach of contract or against equity and good conscience, nor
should it restrain him if the foreign proceedings had been started first. The judge granted the
injunction sought. The defendant appealed.
Reasoning and Holding: appealed dismissed. 1) The court had jurisdiction to grant an injunction
restraining a litigant from continuing proceedings in a foreign court where the parties were amenable
to the English jurisdiction and where it was satisfied (a) that justice could be done between the
parties in the English forum at substantially less inconvenience and expense, and (b) that the stay of
proceedings did not deprive the litigant in the foreign proceedings of any legitimate personal or
juridical advantage which would otherwise have been available to him. The jurisdiction was
nevertheless to be exercised with great caution, but (per O'Connor LJ), subject to the overriding
requirement of caution, the court's jurisdiction to restrain a litigant from continuing proceedings in a
foreign court was not confined to instances where those proceedings were themselves in breach of

contract or against equity and good conscience, nor should the court refrain from granting such relief
merely because the foreign proceedings had been started first (see p 78 b c j, p 79 f, p 82 h, p 84 d e
and p 85 a b and j to p 86 b and h j, post); McShannon v. Rockware Glass Ltd [1978] 1 All ER 625 and
dictum of Lord Scarman in Castanho v. Brown & Root (UK) Ltd [1981] 1 All ER at 149 followed; Piper
Aircraft Co v. Reyno (1981) 454 US 235 considered. (2) England was the natural forum for litigating
the dispute because the defendant and the English company were both amenable to the English
jurisdiction and the US company had made themselves amenable, the license agreement had been
entered into and performed in England and a large number of witnesses were in England where the
clinical trials were carried out. Furthermore, there were no decisive or legitimate juridical advantages
to the defendant in pursuing the foreign proceedings because (a) the fact that in the United State the
case could be prosecuted with minimal risk of costs because of the contingency fee system was not a
juridical advantage and in any event the defendant was at no disadvantage in England because he
had legal aid, (b) there was evidence that the Pennsylvanian court would apply English law to the
issue of damages and the possible advantage that it would apply Pennsylvanian law was highly
speculative and therefore not a real advantage, (c) there was no real advantage for the case to be
tried by jury since jury trial was inappropriate for such a claim, and (d) although English discovery
procedures were different from those in Pennsylvania they were wholly adequate to ensure that the
defendant suffered no injustice. Accordingly, the injunction had been properly granted.
Notes:
Forum non-conviniens is inconsistent with the idea of plaintiff selecting the forum
How to avoid this big issue? Arbitration clause.
Note 1.
Chapter 3. Recognition of Judgments.
Bases for Non-Recognition. Judgments coming from another jurisdiction to the United States
courts. Do not waste your time (1) looking for treaties, there are not treaties for judgment
recognition; (2) do not look in federal statues exception with the FSIA, there is not federal judgment
recognition statues, (Texas has a statue, not part of this class).
Hilton v. Guyot, (1985)
Facts: Guyot, a Frenchman, sued Hilton, an American, in a French court for the recovery of a sum of
money. The French court rendered judgment in favor of Guyot. Plaintiff brought the action to a US
court to recover the sum of money adjudged by the French court to be due from the defendant to the
plaintiff.
Issue: Whether or not a judgment of a foreign nations court entitled to full credit and has a
conclusive effect when sued to other nation.
Reasoning and Holding: No law has any effect, of its own force, beyond the limits of the sovereignty
from which its authority is derived. The extent to which the law of one nation, as put in force within
its territory, whether by executive order, by legislative act, or by judicial decree shall be allowed to
operate within the dominion of another nation depends upon the comity of nations. A foreign
judgment is not entitled to full faith and credit when sued upon another nation, but is a prima facie
evidence only of the claim.
Notes:
This was an arbitration case, long before the NY Convention.
Nowadays, there is not necessary to take the award to the French court before bring it to the
U.S, you take the award directly to U.S court and enforce it under the NY Convention. Forum
selection clause or an international arbitration clausewould avoid this issue.
Reciprocity issue: If somebody will take a judgment to the French court they would not accept
it, they will start from scratchU.S did the same. If French court would enforce then U.S will
enforce.
Somportex Ltd. V. Philadelphia Chewing Gum Corp, (1971)
Summary: Before the Court in the above-captioned case is plaintiff's motion for summary judgment.
The case presents an interesting and somewhat unique situation involving the enforceability of a

foreign judgment which was acquired in England by the plaintiff, Somportex, Ltd. Counsel for both
plaintiff and defendant have ably briefed and argued their respective positions.
Facts: plaintiff, a British Corporation, instituted suit against the defendant, Philadelphia Chewing Gum
Corporation, an American Corporation, for an alleged breach of contract. It obtained leave of the
Queen's Bench Division of the High Court of Justice in England to issue a writ of summons against the
defendant and to serve notice on defendant at its offices in Havertown, Pennsylvania. After receipt of
this notice, consultation with its American counsel, who in turn consulted a British firm of solicitors,
defendant, on August 9, 1967, entered a conditional appearance in England. This action was taken
without prejudice to an application to set aside the writ. On August 18, 1967, within the permissible
time period; defendant sought an order having the writ and the service of the writ set aside for lack
of jurisdiction. In its summons, the defendant alleged that there was no contract between the parties,
or alternatively, that if there was an agreement, it was not made in Great Britain, nor by an agent of
the defendant who traded or resided in England, nor by its terms or implication was to be governed
by English law. Defendant changed its strategy and, not wishing to do anything which might result in
its submitting to the English court's jurisdiction, decided to withdraw its appearance altogether.
Reasoning and Holding: For all of the above reasons, and since the Court finds that there is no
genuine issue as to any material fact, the Court will grant plaintiff's motion for summary judgment.
Notes:

Special appearance objecting personal jurisdiction, answer to the merits, do nothing.

Special appearance: you are allowing the court to decide over jurisdiction.
Lesson: once you make your decision you have to stand by -do not change your mindThere is not treaty but courts might recognize judgment under commodity, is a question of
discretion.
P. 276-277 Footnote 3 (illustration of all options).

Chapter 5. Foreign Sovereign Immunity. (Speaker in class) Background: if public act not
jurisdiction, but if it relates to private or commercial acts the state department will not make courts
to refuse jurisdiction (1952-1976). Develop standard for the court to determine jurisdiction over
sovereign states (1976), courts complaint about poorly written and worded act.
FSIA:

Scope: exclusive basis for court to exercise jurisdiction over foreign states and when there is a
judgment when the court can seize the assets of that foreign state.
Foreign State: is define by the statue in a very poor fashion, it does not say that include the
government (very obvious that it does), the statue says that if the state owns the majority of
the chairs of the institution it is consider direct ownership and perhaps foreign state, later in a
case this indirect ownership was not enough to be considered part of the state. An organ of
the foreign state (no definition included, left to the courts to decide). Standards have been
developed by courts and in a case Kelly v. Company there is a list of factor that do not have to
be all meet at once, they are to determine the purpose of that entity, more like a balancing
test. (Created for national purposes, government agents in chairs, and other factors that help
to link the entity with the foreign state). Cases have decided that Ministers are not protected
under this act.
Procedural Issues:
o Challenge removals to Federal Courts (30 days limitations), not all of defendants have
to be in the removal.
o Jury trial
Exception:
o Waiver of jurisdictional immunity: in the contract, as an express waiver. Even if you not
expressively waive the courts have fined to be imply waiver (agreement to arbitrate in
another country- very limited-, foreign sovereignty have agree to the application of U.S
law speaker things is not enough indication of waiver-, filing of responding pleadings
without raising sovereign immunity).
o Commercial activities: is not the purpose is the nature of the activity. The conduct that
is sufficiently commercial that it can be admitted in U.S courts.

Based on a commercial activity that has substantial contact with the U.S. (not
occur in the U.S but with sufficient contacts)- isolated contracts are not enough,
it has to be analyzed the total activity. It is a question of facts case by case and
is up to the court to determine the sufficiency.
Based on commercial activity in the U.S in connection with an activity perform
elsewhere, -very difficult to apply- the court conclude that the acts has to be
occurring in both places (?)
Based on acts outside the U.S in connection with the commercial activity
outside the U.S but directly affects the U.S (Broadest) some courts have held
that direct effect in the U.S has to be some legally significant acts in the
transaction happened in U.S. (not clear)
Execution Immunity: the congress says that having jurisdiction is not enough to execute,
courts need to be more cautious about it. Court can grab assets of a foreign state if the
property is in the U.S and that property is used for commercial activity in the U.S. What about
debts? Every time you apply to seizure up, at that time has to be in the U.S related to a
commercial activity, it has to be some commercial use of that debt in the U.S to grab that
debt. (Garnishment or attachment).

Exam:
Two essay questions(fact questions) do both sides defendant and plaintiff. (2/3 -1/3)
Open book exam.
TUII 111. 4pm 5/11/15.