Krishanti v. Rajaratnam, US District Court for the District of New Jersey, April 28, 2014
Plaintiffs are victims of bombing attacks allegedly committed by the Liberation Tigers of Tamil Elam (“LTTE”), which is classified by the US Government as a terrorist organization. Defendants are individuals and a Sri Lanka based non-governmental organization that maintains offices in the US, all of which allegedly provided financial support to LTTE. The plaintiffs filed suit in US District Court in New Jersey claiming among other things violations of the Alien Tort Statute based on violations of international law.
Among other arguments, the defendants sought dismissal of the case on grounds of forum non conveniens--the doctrine pursuant to which a court balances a plaintiff’s interest in bringing a case where it wishes against the interests of a defendant which may be forced to defend itself in a distant and inconvenient location. The court applied a three-part test to determine whether to dismiss the case on forum non conveniens grounds. The first factor is whether an adequate alternative forum exists—one where jurisdiction over the defendants could be obtained, the subject matter of the lawsuit could be addressed under local law, and that appropriate relief would be available. The Court concluded that there was no adequate alternative forum for the present claims, because the case at bar sought relief for conduct occurring in the US, not the actions in Sri Lanka which directly caused the plaintiffs to suffer injury. The second factor is the extent of deference to be paid to a plaintiff’s choice of forum. Here, although the plaintiffs did not live in the US and that would ordinarily undermine their claims of convenience, the defendants were in the US, as was most of the evidence likely to be admitted at trial. Thus, the Court concluded that the second factor similarly did not suggest a basis for dismissal. Finally, the Court weighed relevant public and private interests, with the defendants having to show that these interests tipped “decidedly” in favor of dismissal for the factor to benefit their motion. The Court concluded instead that the public interest of a state seeking to ensure that its citizens do not support terrorism is strong, and the private interests of convenience cut both ways. Because none of the three factors favored the defendants, the Court declined to dismiss the case.
[Editor’s note: The Krishanti case is also addressed elsewhere in this report in connection with its discussion of the Alien Tort Statute and Personal Jurisdiction.]
We provide below alphabetically very brief summaries of key US laws addressed by cases summarized in this edition. Please note that these summaries provide a very simplified overview of the statutes and are not intended to describe fully what they may prohibit and require. They are only provided as a guide for the convenience of the reader.
Alien Tort Statute (“ATS”), 28 U.S.C. § 1350 (also called the Alien Tort Claims Act)
The ATS is a jurisdictional statute that allows US courts to decide cases brought by a foreign citizen for torts committed in violation of international law or a US treaty. Much litigation under the statute involves the nature of the claims that can be brought; although treaties have specified terms, "international law" is a more general term. To support ATS jurisdiction, violations of international law "must be of a norm that is specific, universal, and obligatory."
Commodities Exchange Act (“CEA”) §§ 4o, 9(a), 22(a), 7 U.S.C. §§ 6o, 13(a), 25(a)
The CEA applies to the sale of commodities and imposes restrictions similar to those imposed on stock exchanges. Section 4o of the CEA generally makes unlawful the use of any means of fraud or deceit in connection with the sale of commodities or futures contracts involving commodities. Section 22(a) authorizes private individuals to sue for violations of Section 4o in certain limited circumstances. Finally, Section 9(a) prohibits manipulating the price of commodities or their futures contracts.
Dodd-Frank Wall Street Reform and Consumer Protection Act-Anti-Retaliation Provision, 15 U.S.C. § 78u-6(h)(1)(A)
The 2010 Dodd-Frank Act was reform legislation passed in the wake of the financial crisis. As relevant here, one provision expanded incentives for and protection of “whistleblowers” in specific circumstances. Most notably, the provision protects certain individuals from retaliation for making disclosures that are “required or protected” under previously-enacted securities laws or SEC rules. Other important limitations apply.
Foreign Sovereign Immunities Act of 1976(FSIA), 28 U.S.C. Sec. l330, l332(a), l39l(f) and l60l-l6ll
The FSIA codifies the longstanding US rule that non-US Governments generally are immune from suit in US courts. The statute establishes a presumption against suit, and sets out a number of specific exceptions. These include:
Explicit or implicit waiver of immunity by the foreign state;
Commercial activity carried on in the United States or an act performed in the United States in connection with a commercial activity elsewhere, or an act in connection with a commercial activity of a foreign state elsewhere that causes a direct effect in the United States;
Property taken in violation of international law is at issue;
Rights in property in the United States acquired by succession or gift or rights in immovable property situated in the United States are at issue;
Money damages are sought against a foreign state for personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of that foreign state;
Action brought to enforce an agreement made by the foreign state with or for the benefit of a private party to submit to arbitration;
Money damages are sought against a foreign state for personal injury or death that was caused by an act of torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such an act, if the foreign state is designated as a state sponsor of terrorism under section 6(j) of the Export Administration Act of 1979 (50 U.S.C. App 2405(j) or Section 620A of the Foreign Assistance Act of 1961 (22 U.S.C. 2371).
A suit in admiralty is brought to enforce a maritime lien against a vessel or cargo of the foreign state which maritime lien is based upon a commercial activity of the foreign state.
Foreign Trade Antitrust Improvements Act (“FTAIA”), 15 U.S.C. § 6a
The FTAIA is the principal US statute governing the applicability of US antitrust (competition) laws to foreign conduct. The statute is both complicated and unclear, and has been the subject of extensive litigation. Basically, the FTAIA provides that foreign conduct cannot be the basis of a violation of the US antitrust laws unless certain exceptions apply. These exceptions include, most significantly, foreign conduct that has a “direct, substantial, and reasonably foreseeable effect” on competition or prices in a US market, so long as the conduct also independently violates the substance of a US antitrust law. The FTAIA also permits antitrust claims to be brought where US export commerce is affected by anticompetitive acts outside the US. One important qualification is that the FATIA does not apply to claims that there has been an injury to the import trade into the US. Those claims must satisfy a different test under a different statutory regime.
Gun Control Act, 18 U.S.C. ch. 44
The Gun Control Act of 1968 restricts the sales of firearms the numerous classes of persons, including fugitives from justice, drug addicts, persons unlawfully in the US, certain persons suffering from mental illness, and persons convicted of felony crimes.
Hobbs Act, 18 U.S.C. § 1951
The Hobbs Act is a criminal statute that prohibits actual or attempted robbery or extortion affecting interstate commerce between the US and other countries. It is often used in labor disputes and cases involving commercial disputes and public corruption.
Lanham Act, 15 U.S.C. § 1051, et seq.
The Lanham Act is the principal trademark infringement statute in the US, and also creates additional remedies related to false advertising and “cybersquatting.” The statute makes unlawful the use of both registered and unregistered marks that create a “likelihood of confusion” with a pre-existing trademark. More generally, it also prohibits the use of false or misleading statements made in advertising where the effect may be the likely injury to a business. Amendments to the Lanham Act in 1999 prohibited the use of confusingly similar domain names in internet web sites. Parties that violate the Lanham Act may be subject to damages as well as injunctions.
Maritime Drug Law Enforcement Act (“MDLEA”), 46 U.S.C. § 70501, et seq.
The MDLEA makes unlawful drug trafficking on the high seas. It provides that an individual may not “knowingly or intentionally manufacture or distribute, or possess with intent to manufacture or distribute, a controlled substance on board (1) a vessel of the United States or a vessel subject to the jurisdiction of the United States; or (2) any vessel if the individual is a citizen of the United States or a resident alien of the United States.” The statute expressly provides for application to conduct occurring outside the territorial jurisdiction of the US.
Patent Act, 35 U.S.C. § 271 (Patent Infringement)
Under US law, patent infringement occurs generally where a person, “without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor.” Prior knowledge of the patent is irrelevant for purposes of patent infringement liability. A person who “actively induces” the infringement of a patent is also liable as an infringer. Parties that commit patent infringement face monetary penalties as well as an injunction.
Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq.
RICO establishes civil and criminal liability for persons employed by or associated with an “enterprise” that has been engaging in a “pattern of racketeering.” The applicability of the statute turns on the meanings of these two terms. The term “enterprise” is broadly defined and can include formal legal entities such as corporations, as well as more informal associations-in-fact, which are “a group of persons associated together for a common purpose of engaging in a course of conduct.” A “pattern of racketeering” is defined in turn to be the commission of at least two “predicate acts” during a ten-year period, where those acts were sufficiently related to one another to be considered part of a “pattern.” The RICO statute lists 35 state and federal crimes that constitute “predicate acts,” including mail and wire fraud, bribery, obstruction of justice, embezzlement, money laundering, immigration fraud, and an assortment of crimes of violence.
Securities Act of 1933, 15 U.S.C. § 77a, et seq.
The Securities Act generally prohibits a security from being offered or sold to the public unless it is either registered with the Securities and Exchange Commission or an exemption from the registration requirement applies.
Securities Exchange Act of 1934 (“1934 Act”) §§ 10(b) & 15(a)(1), 15 U.S.C. §§ 78j(b) & 78o(a)(1) (also referred to as Exchange Act)
Section 10(b) of the 1934 Act is a broad provision prohibiting fraudulent activities with respect to securities listed on US exchanges, including American Depositary Receipts (“ADRs”). In addition, pursuant to Section 10(b), the Securities and Exchange Commission has promulgated Rule 10b-5, which extends Section 10(b)’s prohibition to fraudulent activity in connection with the purchase or sale of any security, registered or unregistered securities, publicly held or closely held companies, and any kind of entity that issues securities, including federal, state, and local government securities.
Section 15(a)(1) of the 1934 Act prohibits any person or company to from acting as a broker or dealer without first registering with the Securities and Exchange Commission.
Sherman Antitrust Act, 15 U.S.C. §§ 1 & 2
The Sherman Antitrust Act is the most generally applicable antitrust statute in US law. Section 1 of the Act makes unlawful any agreement “in restraint of trade.” For most agreements affecting commercial transactions, the statute only makes unlawful agreements that unreasonably restrain trade, meaning that they have an actual anticompetitive effect on a market for goods or services in the US that is not outweighed by precompetitive benefits. Certain narrow classes of agreements, including price-fixing, bid rigging, and agreements among competitors to divide customers or territories, are per se violations of law as to which the facts, if proved, allow for no defenses. Section 2 of the Sherman Act makes unlawful monopolization and attempted monopolization, which may be undertaken by a company acting unilaterally.
Title VI of the Civil Rights Act of 1964
This federal statute broadly prohibits discrimination by covered employers. It declares an “unlawful employment practice” for an employer to take various actions, including to discriminate against any individual with respect to compensation, terms, or conditions of employment because of such individual’s race, color, religion, sex, or national origin.
Torture Victims Protection Act of 1991 (“TVPA”), Pub. L. No. 102–256, 106 Stat. 73 (1992), codified at 28 U.S.C. § 1350
The TVPA was passed for the purpose of giving a US civil remedy to victims of torture and/or murder. The statute, however, only authorized lawsuits against individuals, not corporations or political groups. When filing suit, the plaintiff must show that he or she pursued all “adequate and available” local remedies. Plaintiffs need not be US citizens to sue.
Victims of Trafficking and Violence Protection Act, 18 U.S.C. § 1581 et seq.
The Victims of Trafficking and Violence Protection Act of 2000, Public Law 106-386, as amended, declares illegal the trafficking in persons, including forced labor, involuntary servitude, slavery and sex trafficking. 18 USC § 1595 creates a private right of action in US federal court for victims of such conduct, allowing them to collect actual damages, punitive damages, and attorneys’ fees. Section 1596 of Title 18 establishes that the remedy applies extraterritorially.
Wire Act, 18 U.S.C. § 1084
The Interstate Wire Act of 1961 prohibiting the operation of certain types of betting businesses in the United States. The statute has been construed to be limited to betting on sporting events, and not to apply to other forms of online gambling.
42 U.S.C. § 1981
This federal statute provides that “all persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of persons and property as is enjoyed by white citizens, and shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other.” The statute is intended to advance the goal that all persons within its scope or equal under the law. Courts have concluded in many cases that it may be enforced by lawsuits in federal court.