The World in US Courts - Winter 2015: Orrick's Quarterly Review of Decisions Applying US Law to Global Business and Cross-Border Activities

by Orrick, Herrington & Sutcliffe LLP
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Winter 2015

The Global law firm Orrick, Herrington & Sutcliffe LLP takes great pride in announcing the Winter 2015 edition of The World in US Courts: Orrick’s Quarterly Review of Decisions Applying US Law To Global Business and Cross-Border Activities. This issue contains our summaries of 30 new US federal court decisions, in areas of the law including Antitrust/Competition, Patent Infringement, Foreign Corrupt Practices Act, and Securities Law.

Please take a moment to review the members of our Editorial Board, who are drawn from Orrick’s 25 offices in North America, Europe, and Asia. From this page, you may also go directly to the list of decisions discussed in this issue and the summaries of the cases and authorities. We have also provided a very brief summary description of the statutes that plaintiffs have sought to apply to conduct outside the US. To do any of these things, please click the appropriate link below.

Editorial Board

Decisions Discussed in This Issue: Winter 2015

Please click the links below to see an expanded summary of the decision described. Copies of any case discussed in this issue are available upon request.

Please note that Orrick may be representing parties in the cases discussed below.  Nothing in the informal summaries contained in this publication should be taken as commenting on the merits of cases, or as a binding constructions of court opinions that are discussed.

Alien Tort Statute (ATS)/Torture Victims Protection Act (TVPA)/Victims of Trafficking and Violence Protection Act (VTVPA)/Foreign Sovereign Immunity Act (FSIA)

District Court Applies FSIA To Dismiss Complaint Regarding Seizure of US Currency by British Police at Heathrow Airport

Ezeiruaku v. Bull, US District Court for the District of New Jersey, November 3, 2014

London police officers confiscated $80,000 in US currency belonging to the plaintiffs, US citizens, while they were at Heathrow Airport. After a fourteen-month delay, an amount less than $80,000 was allegedly returned. Claiming that the seizure was not supported by a reasonable basis to believe that the money was linked to illegal activity, the plaintiffs sought damages alleging that various of their US Constitutional rights had been violated.

The Court disposed of the case on FSIA grounds. The plaintiffs did not dispute that the defendants, British police officers, met the threshold statutory requirement that they were “agents or an instrumentality” of a non-US state. That being the case, the burden shifted to the plaintiffs to allege facts from which the Court might conclude that either or all of three FSIA exceptions claimed by the plaintiffs applied.

First, the Court found that the “commercial activity” exception did not apply, because the seizure of funds was not “commercial in nature or purpose” but rather was a traditional sovereign act of policing, and that the alleged injury stemming from the loss of use of the funds did not have a “transactional relationship” to the US. Second, it found that the “expropriation exception” did not apply, because the requirement that “expropriated” funds be used or maintained by the defendant in the US was not met. Finally, the Court found that the “tortious conduct” exception did not apply because the statute required that the exception be based on torts occurring in the US, not merely torts that may have had an effect in the US. That requirement was not met in connection with the seizure in the UK.

Court of Appeals Affirms Dismissal of ATS Claim Alleging Torture of Sikhs in India

Sikhs for Justice, Inc. v. Nath, US Court of Appeals for the Second Circuit, December 19, 2014

This appeal from a decision reported in the Summer 2014 issue of The World in US Courts considered claims by the families of Sikhs allegedly tortured by the defendants in India.

The Court of Appeals in New York first noted that the plaintiffs had not substantively briefed their objections to the dismissal of their VTVPA claim, and for that reason their appeal of that aspect of the district Court’s decision would not be considered. With respect to the plaintiffs’ claim under the ATS, the Court of Appeals noted that the US Supreme Court in the 2013 Kiobel case had ruled that the ATS generally did not have extraterritorial effect and would only support a claim if the actions complained of “touch and concern” the territory of the US. The Court of Appeals concluded that that this standard had not been met, as the conduct at issue was the alleged torture of Indian nationals by Indian nationals in India. The allegation that certain of the defendants maintained a corporate presence in the US and conducted activities in this country was deemed irrelevant to the question, whose proper focus was on the conduct alleged to have given rise to the claim.

Court of Appeals Rejects ATS Claim Because Defendants’ Conduct, Even Though Sufficiently Connected to the US, Did Not Violate International Law

Mustafa v. Chevron Corporation, US Court of Appeals for the Second Circuit, October 23, 2014

ATS and VTVPA claims were brought by Iraqi nationals alleged to have been victims of torture, imprisonment, and murder by the Saddam Hussein regime. The defendants Chevron Corporation and Banque Nationale de Paris Paribas were alleged to be liable as a result of their alleged diversion of funds to the Hussein regime via the United Nations’ Oil for Food Program (“OFP”), in contravention of international law.

The Court of Appeals affirmed the dismissal of the plaintiffs’ VTVPA claim because that claim can be brought only against individuals, not corporations.

As to the ATS claim, the Court of Appeals found that, while the complaint adequately alleged a number of jurisdictional prerequisites, it failed to allege conduct in violation of international law with a sufficient connection to the US to be cognizable. Specifically, the Court of Appeals stated that, under the US Supreme Court’s 2013 decision in Kiobel v. Royal Dutch Petroleum Company, the plaintiffs were first required to plead that the defendants’ conduct “touch[ed] and concern[ed] the territory of the United States” sufficiently so as to displace the presumption against the extraterritorial application of US statutes. The focus of the inquiry was on the defendants’ alleged conduct in the US, and if a sufficient connection was established the question then became whether that conduct violated international law or could be deemed to have “aided and abetted” such a violation. The corporate citizenship and presence of the defendants in the US was irrelevant, although some other Courts had considered these facts as relevant factors.

In this case, the complaint alleged that many of the decisions and financial transactions giving rise to the alleged violation of the OFP occurred in the US, as did administration of the program itself, at the United Nations headquarters in New York. The Court of Appeals concluded that a number of the alleged acts did “touch and concern” the territory of the US sufficiently to “displace” the presumption against extraterritorial application. But it also found that none was sufficiently connected to a violation of International law—i.e., the conduct of the regime of Saddam Hussein—to support a claim. The Court of Appeals summarized the Complaint as alleging that the defendants “purposefully” violated the OFP, but only “knowingly” aided the Hussein regime’s abuses. Because the alleged violation of international law required that a defendant’s conduct be “purposeful”—in other words, that the defendants purposefully aided in the violation of international law—the Court of Appeals concluded that their mere “knowing” assistance was inadequate to state a claim.

Anti-Cybersquatting Consumer Protection Act ("ACPA")

District Court Orders Domain Name To Be Transferred to Company Invoking Anti-Cybersquatting Statute

Denso Corp. v. Domain Name Denso.com, US District Court for the Northern District of California, December 17, 2014

Denso, a Japanese corporation, registered the domain name denso.com for its business but let the registration lapse. A week later, the domain name was registered by a Russian company, which then transferred it several times until it was owned by a UK entity. Denso’s efforts to reclaim the domain, including a successful arbitration under the auspices of the World Intellectual Property Organization and a lawsuit that was successfully prosecuted through to a favorable decision by the Supreme Court of the Russian Federation. Still, Denso was unable to enforce the orders and recover the domain from the current registrant.

The denso.com domain is maintained in a domain-name registry operated by VeriSign, Inc., which has an office in the Northern District of California. Denso filed suit in federal Court in that district under the ACPA, which provides rights to holders of marks for injury to their property. The statute includes a specific prohibition against “cybersquatting,” the bad-faith use of a domain name in order to profit from the goodwill of a protected mark belonging to someone else. The Court found that Denso’s complaint alleged such violations. The ACPA also provides that in cases where a plaintiff cannot obtain personal jurisdiction over a defendant, it may initiate an “in rem” action—technically against the domain name itself—to obtain a Court order requiring the domain name registry to transfer ownership, if a violation of the statute is found.

As a preliminary matter, the Court found that Denso satisfied the requirement that it could not obtain personal jurisdiction over the current registrant. The Court first noted that the registrant’s actions in maintaining the domain name through VeriSign were inadequate to establish jurisdiction within the meaning of the ACPA. It then observed that the registrant had apparently engaged in informal communications with the Court and had arranged for an initial appearance by counsel, who soon withdrew, but concluded that these actions were likewise inadequate to support personal jurisdiction over an individual claiming some interest in disputed property in an in rem case. Indeed, the Court reviewed the communications and actions and found that they suggested an intent not to waive jurisdictional defenses.

In reaching this conclusion, the Court noted that, under the usual analysis, personal jurisdiction might well attach merely from the act of registration. It concluded that the ACPA standard should be stricter, however, because otherwise the act of registration would preclude the in rem action, which the Court concluded was a result not intended by the US Congress.

[Editor’s note: Denso Corp. v. Domain Name Denso.com is also discussed in the Personal Jurisdiction section of this report.]

Antitrust/Sherman Act/Foreign Trade Antitrust Improvements Act (FTAIA)

District Court Finds Allegation of “Import Commerce” Adequate to Avoid Application of FTAIA Limitations on Sherman Act

Fenerjian v. Nongshim Company, Ltd., US District Court for the Northern District of California, November 4, 2014

In 2012, the Korean Fair Trade Commission found that four Korean companies had conspired to fix the prices of noodles in Korea. US litigation followed, in which the same companies and their US subsidiaries were alleged to have conspired to fix the price of Korean noodles sold in the US. Putative class action complaints were filed on behalf of direct purchasers (food retailers and distributors who purchased directly from the defendants) and indirect purchasers (individuals who purchased Korean noodles from food retailers). Claims were brought under the Sherman Act as well as under numerous state antitrust laws.

After finding that the complaint generally stated a claim under the Sherman Act, the Court found that the alleged conspiracy affected US “import commerce,” and therefore that the Sherman Act applied without any limitation from the FTAIA. The Court’s conclusion was based on allegations that the allegedly conspiring Korean and US defendants manufactured noodles in Korea that were imported into the US, whereupon they were sold in the US to the various retailer, distributor, and consumer plaintiffs. In so ruling, the Court considered the defendants’ argument that the FTAIA should apply unless US imports were “adversely affected” by the alleged conduct, rather than unless the conduct merely have had any effect on import commerce. The Court questioned whether the statute required such a stricter showing but concluded that it had been made, whether necessary or not, and that as a consequence the lawfulness of the defendant’s conduct should be judged under the Sherman Act, without FTAIA limitation.

District Court Permits Plaintiffs to Amend Complaint To Allege Sherman Act Damages Arising from Non-US Sales of eBooks

Lovoho, LLC v. Apple Inc., US District Court for the Southern District of New York, December 3, 2014

This is follow-on private litigation arising out of the criminal case brought against Apple and various book publishers that alleged price-fixing with respect to the sale of eBooks. The plaintiffs are certain US retailers of eBooks who claim that they went out of business as a result of the reduced margins the alleged conspiracy imposed on retailers. At issue was their request to amend their complaint to allege damages arising from lost eBook sales to customers outside the US.

The District Court in New York observed that the viability of the potential damages claim turned on the application of the FTAIA to “export trade,” a term whose application the Court noted was not entirely clear in the context of the sale of eBooks. Among other requirements, the Court stated that the FTAIA permitted Sherman Act claims relating to US “export trade” to proceed only if the alleged conspiracy “had a direct effect on export transactions in which the plaintiffs were engaged,” and that effect gave rise to their claim.” Because such a claim could be brought but had not been included in the complaint, the Court allowed the plaintiffs to amend the complaint to try to allege facts that would support the claim.

Court of Appeals Rejects Application of Sherman Act to Alleged Injury to Competition Outside the US

Motorola Mobility LLC v. AU Optronics Corp. et al., US Court of Appeals for the Seventh Circuit, November 26, 2014

This important appellate decision applying the FTAIA was the subject of a Special Edition of The World in US Courts. To be directed to a copy of it, please click here.

Foreign Corrupt Practices Act (FCPA)

Jurisdiction Under FCPA Not Dependent on Physical Presence in US

United States v. Hoskins, US District Court for the District of Connecticut, December 29, 2014

Defendant Hoskins and co-defendants were indicted for violating the FCPA in connection with an alleged scheme to secure for Alstom Power, Inc., a US company, a contract to build a power plant in Indonesia. Hoskins, a citizen of the United Kingdom and at all relevant times employed in Paris for Alstom Power’s French parent, sought to dismiss the indictment on several grounds, including that the FCPA does not apply extraterritorially to non-US citizens. He stated that he had never been in the US on business.

In the course of denying his motion to dismiss, the Court concluded that Hoskins did not physically have to be present in the US in order to satisfy the FCPA requirement that a defendant have used a “means or instrumentality of [US] interstate commerce” in furtherance of a prohibited payment. The Court noted the allegation of the indictment that Hoskins was acting as an “agent” of a “domestic concern” (Alstom Power, Inc.), and that even though based outside the country he had allegedly approved US “domestic wire transfers.”

Intellectual Property (Patent)

Court of Appeals Clarifies Patent Act Jurisdiction Where Substantial Activities in Sales Transactions Occur Outside US

Halo Electronics, Inc. v. Pulse Electronics, Inc., US Court of Appeals for the Federal Circuit, October 22, 2014

Both the plaintiff Halo and the defendant Pulse are manufactures of electronic components containing transistors that are mounted on printed circuit boards and incorporated into products such as computers and Internet routers. As relevant here, Halo sued Pulse for patent infringement, and the question for the Court of Appeals was whether the worldwide supply chain and distribution of Pulse products rendered the subject transactions a “sale” or “offering for sale” of infringing products “within” the US, which would be necessary for the case to proceed.

At issue were Pulse products manufactured, ordered, invoiced, shipped, and delivered to customers outside the US. However, price negotiations and negotiations over the terms of master agreements for subsequent sales took place in the US. The Court of Appeals first concluded that, on those facts, a “sale” had not occurred within the US. It noted differences between the concept of the “sale” of a product when used as a basis to find patent infringement as opposed to when used as a basis to assert personal jurisdiction over a defendant, and also sought expressly to implement the “strong policy against” the extraterritorial application of US patent law. The Court of Appeals held “that, when substantial activities of a sales transaction, including the final formation of a contract for sale encompassing all essential terms as well as delivery and performance under that sales contract, occur entirely outside the United States, pricing and contracting negotiations in the United States alone do not constitute or transform those extraterritorial activities into a sale within the United states” so as to violate the Patent Act. As relevant here, the Court of Appeals noted that: purchase orders for the Pulse products were issued outside the US; the US contracting did not constitute an agreement to sell “any specific product”; quarterly US price negotiations did not constitute a firm offer to buy and sell, and led to non-US purchase orders that formally established pricing and other terms; and payment for the products was made outside the US. The Court of Appeals also rejected Halo’s argument that a “sale” in the US should be found because it allegedly suffered its financial injury in the US, adding that Halo had recovered damages from non-US sales of electronic components ultimately imported into the US in finished products based on a theory of inducement.

The Court of Appeals next considered whether the facts constituted the “offering for sale” of the products in the US. Here, the Court of Appeals concluded that the critical location for purposes of an “offer” was where the sale was to occur. Thus, even though in this case an offer to sell was allegedly communicated in the US, the fact that the sales were to occur outside the US took the transaction outside the US patent laws.

District Court Concludes That US Contracting for Sales Outside the US Cannot Lead to an Infringing “Sale” or “Offer To Sell”

Ziptronix, Inc. v. OmniVision Technologies, Inc., US District Court for the Northern District of California, October 21, 2014

In a case decided a day before the Federal Circuit appellate decision described above in the Halo Electronics case, the District Court in Oakland, California considered a patent infringement action brought by Ziptronix involving image sensors used in devices like digital cameras, smartphones, and tablets. The defendant OmniVision is a US company that contracts to have image sensors and products containing them made in Asia, for ultimate sale to customers in the US. At issue was a motion for summary judgment filed by two other affiliated defendants, a Taiwanese semiconductor company and its US subsidiary (collectively, “TSMC”), that manufacture and assemble products in Asia for OmniVision.

The Court first considered whether transactions involving TSMC constituted the “sale” or “offer to sell” of allegedly infringing products in the US. Noting that “mere knowledge” that a product ultimately will be imported into the US cannot support a claim of direct infringement, the Court focused on the TSMC entities’ involvement with products actually sold in the US. In this regard, it noted that TSMC neither imported the allegedly infringing products into the US nor directed any other entity to engage in such imports. Rather, and even assuming that the US TSMC entity was responsible for contracting with Ziptronix, the Court characterized TSMC’s actions as potentially contracting in the US for sales outside the country—conduct that does not support direct infringement liability. The Court also concluded that this analysis applied equally to the claim of an “offer to sell,” with the latter being judged with reference to where a proposed sale would take place. Addressing a question that has received different answers in other cases, the Court also concluded that no claim for direct infringement could be supported where an allegedly infringing product was sold overseas and later imported into the US, either directly or as components in finished products.

The Court next considered the claim that the Taiwanese TSMC entity had engaged in indirect infringement by inducing its US subsidiary to engage in direct infringement. Concluding that no direct infringement had been committed by an TSMC entity, however, doomed the claim of indirect infringement. The Court also considered Ziptronix’s claim that TSMC had induced OmniVision to engage in direct infringement through direct imports of allegedly infringing products into the US, but fond the allegation unsupported by record evidence.

Securities Law

District Court Concludes That Substantive Geographical Limitations on Securities Laws Do Not Affect Personal Jurisdiction Analysis

Securities and Exchange Commission v. Spencer Pharmaceutical, Inc., US District Court for the District of Massachusetts, November 14, 2014.

The defendant Jean-Francois Amyot, a Canadian citizen, was alleged by the SEC to have engaged in securities fraud in connection with the establishment of Spencer Pharmaceutical and the promotion and sale of its stock. Amyot argued that the Court lacked personal jurisdiction over him. The SEC’s claim was based on an alleged violation of a federal statute providing for nationwide service of process and for venue in any district any act or transaction constituting the violation occurred. In such cases, the Court observed, personal jurisdiction over the defendant required that he have minimum contacts with the US as a whole, not with the district where the trial would take place. Against this background, the Court had little difficulty in concluding that the conduct Amyot was alleged to have engaged in—including the establishment of US companies, the maintenance of US offices, and the allegedly fraudulent US press releases—satisfied the US constitutional requirement that the claim at issue be “related” to the defendant’s US-based conduct, and that the conduct reveal that the defendant had “purposefully and voluntarily” directed his activities toward the US so that he should expect that he might be held accountable for them in a US Court.

Amyot’s principal argument was that the US Supreme Court’s 2010 decision in Morrison v. National Australian Bank Ltd. established a higher threshold for personal jurisdiction. In that case, the Supreme Court identified limitations on the applicability of the US securities laws to conduct occurring wholly or partially outside the US. The District Court disagreed, noting that Morrison related to the substantive elements of a violation, not whether a Court could exercise personal jurisdiction over a particular defendant. The Court thus denied Amyot’s motion to dismiss the complaint on grounds of personal jurisdiction, and reserved for trial further issues relating to the elements of a violation that the SEC would be required to prove.

[Editor’s Note: The Spencer Pharmaceutical case is also addressed in the Personal Jurisdiction section of this report.]

White Collar Criminal

District Court Rejects Constitutional Challenge to Prosecution Of Non-US Citizen Arrested On the High Seas and Charged With Violations of US Drug Laws

United States v. Aybar-Ulloa, US District Court for the District of Puerto Rico, December 22, 2014

The defendant, a citizen of the Dominican Republic, was arrested by US law enforcement officers with two others while on board a stateless boat in the Caribbean Sea, outside of any nation’s territorial waters. At the time of the arrest, the US officials, who were guests aboard a Dutch warship, seized 721.5 Kg. of cocaine. The defendant was charged with violations of the Maritime Drug Law Enforcement Act (“MDLEA”) and he moved to dismiss the indictment on grounds that the act’s extraterritorial application to him violated the US Constitution.

The Court first observed that the MDLEA expressly applied outside the territory of the US, thus overcoming the presumption that criminal laws would apply only in the US. The issue for decision was whether this exercise of jurisdiction was consistent with the US Constitution’s Due Process Clause.

The Court’s analysis began with the observation that stateless vessels “enjoy little or no protection” under international law. That principle is also reflected in the 1958 Convention on the High Seas, which the US ratified. As a result, the Court concluded that the US could prosecute defendants on such vessels as if they were US-registered ships. That satisfied the MDLEA requirement that the criminal conduct have occurred on a “vessel subject to the jurisdiction of the United States,” and the Court found the indictment to be constitutional.

District Court Rejects Statutory and Constitutional Challenge to Obstruction of Justice Prosecution Arising Out of Alleged Murder in Colombia

United States v. Bocachica and United States v. Sepulveda, US District Court for the Eastern District of Virginia, November 6, 2014

These companion cases arose out of the alleged murder of a US Drug Enforcement Administration agent, who was also an Assistant Attaché at the United States Embassy in Colombia, in a taxi cab in Bogota. Defendant Bocachica was alleged to have destroyed evidence of the crime, and was charged with obstruction of justice under 18 U.S.C. 1512(c). Defendant Sepulveda was separately prosecuted for violations involving murder and kidnapping of US diplomatic personnel. As relevant here, both defendants argued that the statutes under which they were being prosecuted could not constitutionally be applied to them because their actions had insufficient contacts with the US.

The District Court first rejected the defendants’ argument that the criminal statutes at issue should not be interpreted to apply to conduct outside the US. The Court recognized the presumption against extraterritorial application of US criminal laws, but concluded that the presumption had been overcome by a statutory provision that expressly authorized application of those laws to conduct in other countries.

The Court then rejected a constitutional challenge to the charges, citing the requirement that there must be enough of a “nexus” between the defendant and the US that the prosecution would not be “arbitrary or fundamentally unfair.” To determine whether the necessary connection existed, the Court employed a test that asked whether the defendants’ conduct implicated “important American interests.” In this case, the US interest in the security of its citizens abroad, especially ones serving in diplomatic capacities, was found applicable and substantial. The Court also noted the US interest in fighting the illegal trafficking of drugs into the US. The Court further found that it was not relevant that the defendants may not have known, at the time of the incident, that the victim was an American citizen working in the US diplomatic corps.

A second constitutional requirement identified by the Court is that the defendant have reason to anticipate that he would be prosecuted for his conduct somewhere—not necessarily in the US. In Bocacchica’s case, the Court found that this test was met by allegations that the defendant had removed evidence of the crime from the taxi, knew (as a matter of local reporting after the incident) that the victim was a US agent, and that local police had sought to recover the vehicle. Finally, the Court noted that obstruction of justice was an extraditable offense under the extradition treaty between the US and Colombia, further providing notice to Bocachica that he might be prosecuted for his alleged conduct. In Sepulveda’s case, the Court similarly found that the alleged crimes—of murder and kidnapping implicated “important American interests” and gave the defendant reason to think he would be prosecuted somewhere.

District Court Rejects Constitutional Challenge Where Charge Based in Part on Evidence Seized in Cambodia in Violation of Cambodian Law

United States v. Boyajian, US District Court for the Central District of California, November 26, 2014

Boyajian, a US citizen, was charged with various crimes relating to his allegedly engaging in sex with a minor while in Cambodia.

The Court first considered whether to exclude certain evidence collected in Cambodia in connection with a search conducted jointly by US and Cambodian law enforcement officials. Because the search was deemed to be a “joint venture” between US and non-US law enforcement, the Court concluded that the admissibility of evidence would be governed by the same Fourth Amendment standards as would apply if the search had been conducted by US police in the US.

In a prior opinion, the Court had concluded that Fourth Amendment requirements had been met because the evidence had been collected in accordance with Cambodian law. Subsequently, the Supreme Court of Cambodia had considered Boyajian’s case under Cambodian law and found the search to be illegal. Analyzing the specific provisions of law considered by the Cambodian Supreme Court and the evidence given there, the US Court acknowledged that the Cambodian Court’s ruling might be in conflict with its own, in which case the US Court might have to defer to the Cambodian ruling based on principles of international comity. But the Court did not resolve the “difficult question” whether there was an irreconcilable conflict, because it concluded that it would not exclude the evidence in any event. In reaching this conclusion, the Court applied US standards as to the exclusion of evidence, and found applicable the “good faith exception” to the exclusionary rule, under which evidence would be admissible from even an illegal search if the police had an objectively good faith belief that their conduct was not improper.

As to the merits, Boyajian moved to dismiss the charge on grounds that his conduct did not satisfy the terms of the criminal statute, which applies to a US citizen or permanent resident who “travels in foreign commerce or resides, either temporarily or permanently, in a foreign country, and engages in any illicit sexual conduct with another person.” The Court rejected his arguments, finding first that the five-month period between his departure from the US and the alleged commission of the violation, and the fact that he may have taken intervening trips, did not preclude a finding that the alleged violation occurred while he was “travel[ing].” Next, the Court rejected his argument that the statute could not be applied because at the time of the alleged violation he was a Cambodian resident, finding that his US citizenship provided a “sufficient nexus” with the US to support a criminal prosecution based on extraterritorial conduct. The Court also denied various arguments by Boyajian that charges should be dismissed as violative of his constitutional Due Process rights and right to confront witnesses against him, concluding most notably that Boyajian had been denied no constitutional right where he was unable to compel the attendance of witnesses in Cambodia who were outside the Court’s jurisdiction.

Forum Non Conveniens/International Comity

District Court Dismisses Does Not Give Weight to Forum Selection Clause But Nonetheless Dismisses Case on Forum Non Conveniens Grounds

Lavera Skin Care North America, Inc. v. Laverana Gmbh & Co. KG, US District Court for the Western District of Washington, December 19, 2014

A German limited partnership in the business of manufacturing natural cosmetics was sued by its exclusive North American distributor under breach of contract theories, and to allow the distributor to continue to use the domain name, “lavera.com.” The manufacturer moved to dismiss the claim on forum non conveniens grounds.

The US District Court in Washington State stated that a “strong presumption” exists in favor of a plaintiff’s choice of forum, and that it would be disturbed only where private and public interest factors “strongly favor” that the dispute be resolved in a forum outside the US. As a preliminary matter, the Court rejected the manufacturer’s argument that recent US Supreme Court decisions enforcing forum-selection clauses required that the agreement, which provided that “the place of jurisdiction shall be Hanover” [Germany], be read to mean that the dispute be heard only in a German Court. The Court concluded that the absence of the word “exclusive,” or anything like it, rendered to choice of forum “permissive,” and therefore the reference to a German forum did not impose a mandatory forum.

The Court nonetheless concluded that dismissal should occur based on the traditional forum non conveniens analysis. First, the Court concluded that Germany provided an adequate alternative forum (the parties at the very least had so agreed in their contract), and that it was an appropriate one since German law applied to the contract in question and that German law permitted suit to be brought for relief that was comparable to what a US Court might award. Second, the Court determined that factors of the “private interest” of the parties favored litigation in Germany. Among the factors cited by the Court were: Litigation in Germany would be significantly more convenient for the manufacturer and its witnesses, who do not speak English, while the distributor’s principal was a German citizen and spoke German fluently; the key witnesses as to liability live in Germany; the location of evidence slightly favors a German forum; US Courts might not be able to compel the attendance or participation of German witnesses; and that a judgment in favor of the distributor might not be honored in Germany.

Personal Jurisdiction

District Court Finds Jurisdiction Over Fraud Claims but Not Related Tortious Interference and Breach of Fiduciary Duty Claims Against Foreign Defendants

Ahn v. Korea Advanced Institute of Science and Technology et al., US District Court for the District of New Jersey, November 17, 2014

Plaintiff Daniel Ahn, a citizen of New Jersey, brought claims of tortious interference with contract, common law fraud, fraudulent inducement, and breach of fiduciary duty against KASIT, a South Korean University, and Nam Pyo Suh, its President. Ahn claimed defendants promised him that he would be made a Distinguished Professor at KAIST and the CEO of Mobile Harbor, Inc., a corporation created to execute the industrial aspects of a technology for loading/unloading shipping containers. Ahn claimed that defendants assured him that he would be entitled to 50% of the royalty and intellectual property rights for each and every patent application that he submitted, and that KAIST would ensure continued funding for Mobile Harbor, Inc.

The complaint alleged that KAIST underfunded Mobile Harbor, Inc., and refused to transfer intellectual property rights that were necessary for Ahn to execute a joint venture agreement involving Mobile Harbor Inc. and Coastal Mechanics, a Texas corporation. Defendants moved to dismiss for lack of personal jurisdiction.

The Court applied New Jersey’s long-arm statute, which permits personal jurisdiction to the fullest limits of the Due Process Clause of the US Constitution. This requires a determination of whether (1) defendants made constitutionally sufficient minimum contacts with the New Jersey and (2) exercise of jurisdiction would comport with “traditional notions of fair play and substantial justice.”

The Court determined defendants had did not have “continuous and systematic” contacts with New Jersey to sufficient to confer general jurisdiction. It then examined whether defendants purposefully directed the activities causing the alleged injury to New Jersey, in order to determine specific jurisdiction over the claims.

The Court found that there were sufficient contacts to confer specific jurisdiction over defendants for Ahn’s two fraud claims, as Ahn was recruited for his position in New Jersey. The Court did not have jurisdiction over Ahn’s tortious interference and breach of fiduciary duty claims, as these did not arise out of the recruitment process or other contacts with New Jersey.

The Court determined that exercising jurisdiction over these claims comported with fair play and substantial justice. It explained that Suh, the principal defendant and witness, was located in Massachusetts, which was not so far from New Jersey as to cause Suh undue hardship in coming to New Jersey to testify at trial, and that New Jersey had an interest in protecting its citizens from fraudulent misrepresentations. The difference between Massachusetts and New Jersey for the purposes of KAIST was irrelevant as both are about equally distant from South Korea.

District Court Grants Third-Party Cross-Claim Malaysian Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction.

Allphin v. Peter K. Fitness, LLC, US District Court for the Northern District of California, December 11, 2014

Plaintiff, an individual claiming injuries arising from her use of a defective fitness band, brought products liability claims against Defendants, Peter K. Fitness and Fulco Fullfillment. The defendants filed cross-claims for indemnification and contribution against Ideal Jacobs (Malaysia) Corporation (“IJ Malaysia”), along with various other parties.

At issue was whether the Court could exercise personal jurisdiction over IJ Malaysia, which was alleged to be a limited-share public company incorporated in Malaysia and “an investment holding company” for a Chinese company. Personal jurisdiction in California was allegedly based on IJ Malasia having committed a tortious act in the state. In particular, IJ Malaysia was alleged to have designed, constructed, and sold the fitness band upon which Plaintiff’s claims were based. It was also alleged to be a subsidiary of a corporation authorized to conduct business in California and thus itself subject to personal jurisdiction in the state. Finally, it was alleged to be part of a joint venture with other cross-claim defendants, and that the contacts of all should be considered in determining whether jurisdiction exists over any.

IJ Malaysia filed a motion to dismiss the cross-claim, contending that it is not subject to general or specific jurisdiction in California because it has no contacts with the United States or California. IJ Malaysia argued that it is “merely a holding company,” and not a party to any contractual agreement with either of the named defendants. It also denied that it was involved in the design, construction, fabrication, or sale of the fitness band at issue.

After taking judicial notice of various website information of the respective parties to the litigation, the Court applied the three-prong test established for personal jurisdiction: whether (1) the non-resident defendant purposefully directed his activities or consummated some transaction within the forum or a resident of the forum, or purposefully availed himself of the privilege of conducting activity in the forum; (2) the claim arises out of or relates to defendant’s forum-related activities; and (3) the exercise of jurisdiction comports with fair play and substantial justice (i.e., is reasonable).

The Court applied the personal jurisdiction standard for tort-based actions and assessed whether IJ Malaysia’s activities were “purposefully directed” at California, and found that they were not. First, the Court found that the actions of an individual who held positions with both IJ Malaysia and a US company were insufficient to confer jurisdiction upon IJ Malaysia, as it was unclear on whose behalf the individual was acting during his contacts with California. Second, under the “representative services doctrine,” the Court found that IJ Malaysia, as a passive holding company would be subject to jurisdiction on the basis of its Chinese subsidiary’s actions only where “the local subsidiary performs a function that is compatible with, and assists the parent in the pursuit of, the parent’s own business.” Here, the subsidiary’s contacts with California were insufficient to confer jurisdiction. Finally, even assuming that IJ Malaysia was not a passive holding company, the Court determined that its potential contacts with California did not give rise to the claims alleged in the complaint. Though the Court granted IJ Malaysia’s motion to dismiss for lack of personal jurisdiction, it also granted Defendants request for limited jurisdictional discovery on the issue.

District Court Finds Personal Jurisdiction Over Italian Officer of American Corporation

Alpha Capital Anstalt v. New Generation Biofuels Inc., et al., US District Court for the Southern District of New York, November 18, 2014

Plaintiff Alpha Capital Anstalt, a Lichtenstein-based company, brought an action in federal court in New York alleging securities fraud against New Generation Biofuels (NGBF) and its founders, officers, and directors, including the Chief Technology Officer, Italian resident Andrea Festuccia. Alpha Capital alleged that it was fraudulently induced to invest in NGBF as a result of defendants’ misrepresentations regarding the viability of NGBF’s pending patent applications, the value of a master license agreement covering those pending patents, and concealed NGBF stockholdings and sales.

Festuccia had never signed any of the securities filings at issue, though he signed and approved all of NGBF’s patent applications, including those submitted in the United States, and approved valuations of the Master License Agreement that were the basis of values disclosed in NGBF’s financial statements and SEC filings.

Alpha Capital’s claims were based on US securities laws that provide for worldwide service of process and permit the exercise of personal jurisdiction to the limit of the Due Process Clause of the US Constitution. In determining whether it had specific personal jurisdiction over Festuccia, the Court considered whether he had “purposefully availed” himself of the privilege of doing business in New York and thus could foresee being sued in the US over claims arising from his activities. The Court found that specific personal jurisdiction existed, noting that NGBF was a publically-traded US company and Festuccia was aware of and responsible for NGBF’s statements regarding the viability of its patents.

District Court Declines To Exercise Personal Jurisdiction Where the Only Connections With the Forum State Stemmed From Plaintiff’s Domicile

Art Assure Ltd., LLC v. Artmentum GMBH, et al., US District Court for the Southern District of New York, November 4, 2014

Plaintiff Art Assure is a limited liability company that finances purchases of valuable artwork. It is incorporated in Delaware and maintains its principal place of business in New York. Defendant Artmentum, a seller of such artwork, is a Swiss corporation operating in Switzerland. Art Assure and Artmentum entered into negotiations concerning Art Assure’s prospective purchase, with Artmentum’s involvement, of a collection of nineteenth and twentieth century artwork then owned by a Japanese bank. Art Assure and Artmentum executed a Memorandum of Understanding (“MOU”) to govern the terms of the sale. The MOU contained a place of jurisdiction clause that required disputes under or relating to the MOU to be resolved by arbitration in Switzerland. Negotiations between the parties soon fell apart. Art Assure then sued Artmentum, claiming that the latter’s fraudulent misrepresentations inducing Art Assure to expend considerable resources to research the transaction, to obtain potential financing for the transaction, and to research the collection. Defendants moved to dismiss the Complaint for lack of personal jurisdiction.

The Court found that it had no jurisdiction over Defendants under New York’s long-arm statute because they did not transact business in New York or contract to supply goods or services in New York, the two statutory requirements. As the Court recapped: the Complaint did not allege any ongoing relationship between Plaintiff and Defendants, nor that Defendants negotiated or executed the MOU in New York; the choice of law and choice of forum clauses in the MOU designated Switzerland; the due diligence was to take place in Japan; the goods were to be shipped from Japan to Switzerland; and the closing was to take place in Switzerland. The Court also rejected Art Assure’s argument that its own status as a New York domiciliary and its own conduct in New York, and that the parties’ transatlantic negotiations, were relevant to personal jurisdiction over Artmentum. The Court noted that that, while Artmentum maintained websites, they merely highlighted Defendants’ representations that they serve clients globally and that this was an inadequate basis for jurisdiction, even if some sales were made in New York.

The Court also found that Art Assure failed to establish jurisdiction under the alternative means of showing that Artmentum’s allegedly tortious acts caused an injury to a person or property in New York, noting that the “injury in New York” prong is not satisfied by remote or consequential injuries which occur in New York only because the plaintiff is domiciled, incorporated or doing business in the state. In the Court’s view, none of the critical events took place in New York, and the only connections with New York stemmed from Plaintiff’s domicile.

District Court finds personal jurisdiction over German Entity Engaging in Trademark Infringement and Cybersquatting

Bittorrent, Inc. v. Bittorrent Marketing GMBH, US District Court for the Northern District of California, San Jose Division, November 5, 2014

US Plaintiff Bittorrent is a provider of peer-to-peer digital delivery software. It filed a motion seeking a default judgment against German defendant Bittorrent Marketing, asserting trademark infringement, state law unfair competition, and violation of anti-cyber-squatting statutes based on Bittorrent Marketing’s acquisition of web domains using Bittorrent’s trademark and misspellings thereof, and its alleged attempts to demand money from Bittorrent for release of those names.

The Court assessed Bittorrent’s claim that specific personal jurisdiction existed over Bittorrent Marketing using a three part test, examining whether (1) Bittorrent Marketing purposefully directed its activities to California, or otherwise availed itself of the privilege of conducting activities in California; (2) whether Bittorrent’s claim arose out of or was related to the Bittorrent Marketing's California-related activities; and (3) whether the exercise of jurisdiction was reasonable.

The Court found that Bittorrent Marketing’s alleged activities satisfied all prongs of this test. The Court found that Bittorrent Marketing had intentional and systematic conduct with the forum, dating back to 2003, including the registration of an ever-increasing number of domain names incorporating the California-based plaintiff's trademark, undertaken in an effort to extort money from that plaintiff. The Court further noted that in cybersquatting actions, specifically, personal jurisdiction exists in the forum where a trademark owner is located. Finally, there was no doubt that the alleged injury arose out of Bittorrent Marketing’s registration of domain names incorporating Bittorrent’s trademark.

After Bittorrent established the first two prongs of the test, the burden of proof shifted to Bittorrent Marketing to present a compelling case that exercising jurisdiction would be unreasonable. Bittorrent Marketing did not appear in the case to make this argument, however, and the Court held that it had personal jurisdiction to enter a default judgment against Bittorrent Marketing.

District Court Finds Personal Jurisdiction Based On Non-US Defendant’s Operation of Website Advertising in Forum State

Circle Click Media LLC, et al. v. Regus Management Group LLC, et al., US District Court for the Northern District of California, October 14, 2014

In 2011 and 2012, Plaintiffs entered into office agreements with Defendants to lease commercial office space in California and New York, based on representations made on defendants’ website. Plaintiffs alleged that Defendants assessed charges beyond what was permitted by their agreements. The complaint alleged state law claims as well as one based on the federal RICO law. Defendant Regus PLC (“Regus”), a Channel Islands public limited company, moved to dismiss for lack of personal jurisdiction.

Courts in the Ninth Circuit evaluate personal jurisdiction using a three-prong test, according to which: (1) the non-resident defendant must purposefully direct activities to the forum state, (2) the claim must arise out of or relate to the defendant's forum-related activities, and (3) the exercise of jurisdiction must comport with fair play and substantial justice.

The Court denied Regus’ motion. First, the Court considered Regus’ operation of a website targeting California residents, and found that conduct to satisfy the “purposeful direction” portion of the test, because it was an intentional act and there was a foreseeability of harm suffered in California from the alleged conduct. Second, the Court found that Plaintiffs’ alleged injuries would not have occurred but for Regus’ activities directed at California, as they would not have rented office space from Defendants absent the website’s solicitation of business. Finally, adopting a multi-factor test used by Courts in the Ninth Circuit, the Court found that, on balance, the factors (including, among others, the extent of a defendant’s purposeful interjection, the forum state’s interest in adjudicating the dispute, and the existence of an alternative forum) weighed considerably in favor of exercising personal jurisdiction over Defendants. Finally, the Court concluded that the assertion of jurisdiction comported with the traditional notions of fair play and substantial justice.

District Court Exercises Personal Jurisdiction Where Defendants Acquired and Breached a Duty to Plaintiff With Knowledge That the Injury to Plaintiff’s Business Would Be Felt in The Forum State

Concur-Texas, L.P. v. Duradril, LLC, et al., US District Court for the District of Utah, Central Division, November 4, 2014

Plaintiff Concur is a Utah limited partnership with its principal place of business in Salt Lake City, Utah. Defendant Dynomax Drilling Tools, Inc. (“Dynomax-Canada”) is a Canadian corporation, with its principal place of business in Alberta, Canada. Defendant Dynomax Drilling USA, Inc. (“Dynomax-USA”) is a Texas corporation with its principal place of business in Harris County, Texas. Concur entered into an agreement with Dynomax-Canada to purchase 29 pieces of heavy equipment called slide reamers. As part of the agreement, the president of Dynomax-Canada executed a Vendor Certificate that stated, in part, that the “Vendor hereby irrevocable [sic] submits and consents to the exclusive jurisdiction of the state and federal Courts located in the County of Salt Lake, State of Utah and waives any objection it may now or hereafter have to venue or to convenience of forum.” Concur subsequently leased all of the purchased slide reamers to Defendant Duradril. The lease between Concur and Duradril contained a similar mandatory Utah venue provision in its Vendor Certificate. Duradril continued to make payments on the slide reamers to Concur until the shortly after the Dynomax entities purchased Duradril. Concur alleged that Dynomax had assumed the obligations of Duradril, and sued the Dynomax entities, which argued that the case should be dismissed because personal jurisdiction over them could not be asserted in Utah.

The Court stated that it could assert specific personal jurisdiction over a nonresident where the defendant has purposefully directed his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or are related to those activities. The specific jurisdiction inquiry is two-fold. To show “purposeful direction,” the Court required (1) an intentional action by the defendant that was (2) expressly aimed at the forum state (3) with knowledge that the brunt of the injury would be felt in the forum state. Further, if the defendant’s activities create sufficient minimum contacts, then the Court must consider whether the exercise of personal jurisdiction over the defendants offends traditional notions of fair play and substantial justice.

The Court found that Plaintiff had sufficiently alleged “purposeful direction” and the Dynomax defendants had the requisite minimum contacts with Utah. The Court first observed that Concur had alleged an intentional wrongful act by the Dynomax defendants—i.e., they were alleged to have breached the Lease and retained equipment that belonged to Plaintiff despite knowing that Concur was its rightful owner. Second, the Court found that the Dynomax defendants’ conduct was expressly aimed at the forum as it appeared their goal was effectively to reach into Utah and unlawfully take Concur’s property for their own use. Additionally, the Dynomax defendants knew that both the original Vendor Certificate and Lease contained a mandatory Utah venue provision. Finally, the Court found that there was no meaningful dispute that the brunt of Plaintiff’s injury was suffered in the forum state.

The Court also found that the Dynomax defendants were unable to present a compelling case that the exercise of jurisdiction would be unreasonable. The Court considered a variety of factors: (1) the burden on the defendant, (2) the forum state’s interest in resolving the dispute, (3) the plaintiff’s interest in receiving convenient and effective relief, (4) the interstate judicial system’s interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the several states in furthering fundamental substantive social policies.

District Court Rejects Effort To Dismiss Suit Brought by Members of the US Military For Injuries Arising From Fukushima Nuclear Disaster

Cooper v. Tokyo Electric Power Co., US District Court for the Southern District of California, October 28, 2014

Plaintiffs are members of the US military who allege they were injured by radiation exposure when they were deployed near the Fukushima-Daichi nuclear power plant following the earthquake and tsunami that damaged the plant. The defendant “TEPCO” owns and operates the plant. The complaint alleged that TEPCO was negligent in performing a wide variety of tasks relating to the plant’s design, construction, and operation.

After concluding that the complaint did not impermissibly require the resolution of political questions, and that many of the claimed violations of law had been adequately supported by allegations of fact, the district Court in Los Angeles considered a number of arguments by TEPCO based on its status as a non-US company enmeshed in a dispute involving events that occurred in Japan.

TEPCO first argued that the case should be dismissed on grounds of the forum non conveniens doctrine because litigating the dispute in California would result in “oppressiveness and vexation” disproportionate to the plaintiffs’ general right to litigate a dispute in a forum of its choosing. The legal test required the Court to consider whether an “adequate alternative forum” for hearing the dispute exists, and whether the balance of private and public interests favored dismissal.

In concluding that TEPCO had not met this burden, the Court did agree that Japanese Courts would provide an adequate alternative forum, despite the highly sensitive subject matter. The relevant private interests, and the Court’s evaluation of them, were as follows: (i) residence of the parties and witnesses—about evenly balanced; (ii) convenience to the litigants—strongly favored the US, as the plaintiffs might not have the resources to litigate in Japan, while TEPCO could defend itself in the US, albeit at high cost; (iii) access to evidence—neutral, as TEPCO was unable to demonstrate that the cost of producing documents in US litigation would be prohibitive; (iv) ability to compel testimony of unwilling witnesses—this factor favors litigation in Japan; (v) the cost of bringing witnesses to trial—this factor weighs “only slightly” in favor of litigation in Japan; (vi) enforceability of a judgment—neutral.

The Court then considered so-called “public” interests: (i) the local interest in the litigation—slightly favors retaining the case in the US, as Japan’s strong interest in adjudicating claims arising out of the relevant events is slightly overbalanced by the US interest in seeing that members of its armed forces are compensated for injuries, and the fact that the US would ultimately be responsible for the plaintiffs’ medical care; (ii) the Court’s familiarity with governing law—a factor supporting retention of the case, as TEPCO made no assertion that Japanese law would apply.

On the basis of these factors, the Court concluded that litigation in the US would be more convenient, on balance, and so rejected TEPCO’s arguments.

Next the Court considered TEPCO’s motion to dismiss the claim on grounds of “international comity”—which the Court described as allowing deference to the judgment of an alternative forum where the issues are “entangled in international relations.” The Court denied the motion, finding that (i) US ratification of a treaty providing for adjudication of claims by victims of a nuclear incident in the country where the incident occurred could not be considered because the treaty had not yet gone into effect; (ii) while Japan’s interest in adjudicating the dispute is strong, its interest with respect to compensating non-Japanese plaintiffs for TEPCO’s negligence is not; and (iii) Japan, while an adequate forum, is not more so than the US.

District Court Finds Standards for “Personal Jurisdiction” Under the Anti-Cybersquatting Consumer Protection Act (ACPA) Differ From Those in the Ordinary Case

Denso Corp. v. Domain Name Denso.com, US District Court for the Northern District of California, December 17, 2014

Denso, a Japanese corporation, registered the domain name denso.com for its business but let the registration lapse. A week later, the domain name was registered by a Russian company, which then transferred it several times until it was owned by a UK entity. Denso’s efforts to reclaim the domain, including a successful arbitration under the auspices of the World Intellectual Property Organization and a lawsuit that was successfully prosecuted through to a favorable decision by the Supreme Court of the Russian Federation. Still, Denso was unable to enforce the orders and recover the domain from the current registrant.

The denso.com domain is maintained in a domain-name registry operated by VeriSign, Inc., which has an office in the Northern District of California. Denso filed suit in federal Court in that district under the ACPA, which provides rights to holders of marks for injury to their property. The statute includes a specific prohibition against “cybersquatting,” the bad-faith use of a domain name in order to profit from the goodwill of a protected mark belonging to someone else. The Court found that Denso’s complaint alleged such violations. The ACPA also provides that in cases where a plaintiff cannot obtain personal jurisdiction over a defendant, it may initiate an “in rem” action—technically against the domain name itself—to obtain a Court order requiring the domain name registry to transfer ownership, if a violation of the statute is found.

As a preliminary matter, the Court found that Denso satisfied the requirement that it could not obtain personal jurisdiction over the current registrant. The Court first noted that the registrant’s actions in maintaining the domain name through VeriSign were inadequate to establish jurisdiction within the meaning of the ACPA. It then observed that the registrant had apparently engaged in informal communications with the Court and had arranged for an initial appearance by counsel, who soon withdrew, but concluded that these actions were likewise inadequate to support personal jurisdiction over an individual claiming some interest in disputed property in an in rem case. Indeed, the Court reviewed the communications and actions and found that they suggested an intent not to waive jurisdictional defenses.

In reaching this conclusion, the Court noted that, under the usual analysis, personal jurisdiction might well attach merely from the act of registration. It concluded that the ACPA standard should be stricter, however, because otherwise the act of registration would preclude the in rem action, which the Court concluded was a result not intended by the US Congress.

[Editor’s note: Denso Corp. v. Domain Name Denso.com is also discussed in the Anti-Cybersquatting Consumer Protection Act section of this report.]

District Court Declines to Exercise Personal Jurisdiction Where Plaintiff Failed To Show that Actions by Defendant Operating Outside of US Caused Harm that it Knew Would Likely be Suffered in Forum State

Gregory Reimer v. Corporacion de Viajes Mundiales S.A., US District Court for the Northern District of California, October 30, 2014

Plaintiff sustained severe injuries from participating in a “zip-line” activity in Costa Rica on August 23, 2012. Plaintiff alleged that the zip-line activity was arranged by and purchased through Defendants Costa Rican Internet Services (“CRIS”) and Costa Rican Vacations (“CRV”). Defendant CRIS moved to dismiss the action for lack of personal jurisdiction or, in the alternative, on the basis of forum non conveniens. CRIS is a treasury management company that processes credit cards through a payment link on the internet. It is incorporated in Delaware and, while it maintains a mailing address in Florida, it does not otherwise maintain a physical location in the United States and maintains its operations in Costa Rica. Plaintiff argued that jurisdiction was proper because CRIS is an “alter ego” and ostensible agent of other CRV entities, with which it should be deemed to share US contacts for purposes of establishing personal jurisdiction over CRIS.

The Court found that Plaintiff had not made a prima facie case that CRIS was the alter ego of other companies. It noted that there had been no showing that CRV controlled CRIS to such a degree that CRIS was a mere instrumentality of CRV and, even if the entities had common owners, there was no evidence that one controlled the other. Further, even if there were a unity of interest, Plaintiff had not made a showing that inequity would result unless the Court disregarded the corporate form. The Court similarly found that Plaintiff had not made a showing of ostensible agency for purposes of using any CRV entity’s contacts with California for the jurisdictional analysis. There was no parent-subsidiary relationship between CRV and CRIS and Plaintiff failed to provide evidence that either entity performed tasks that the other would have to complete itself. Without the other entities’ contacts to rely upon, the case for personal jurisdiction over CRIS was inadequate. The Plaintiff had did not show that actions by CRIS caused harm that CRIS knew would likely be suffered in California, the Court concluding that merely providing a payment link would foreseeably cause a personal injury to someone from California on vacation in Costa Rica.

Additional Jurisdictional Discovery Ordered Against India and Hong-Kong Defendants on Copyright Infringement and Unfair Competition Claims

International Diamond Importers Inc. d/b/a Meira T. Designs v. Oriental Gemco (NY), Inc. et al., US District Court for the Southern District of New York, November 24, 2014

Plaintiff Meira T. Designs, a jewelry manufacturer and seller, sued defendants Oriental Gemco HK Co., located in Hong Kong, Oriental Gemco Pvt. Ltd., located in India, and Oriental Gemco (NY), Inc., located in New York, asserting claims including copyright infringement and federal and state law unfair competition. The non-US defendants moved to dismiss the suit for lack of personal jurisdiction, and plaintiff cross-moved for jurisdictional discovery.

The Court noted that the relationship between the various defendant entities was unclear. Plaintiff asserted the three companies made up one organization with manufacturing in Hong Kong and India and its sales office in New York, while defendants claimed that the Oriental Gemco companies were three separate companies which sold jewelry in different countries, and thus that jurisdiction over each must be assessed individually.

The Court first analyzed general jurisdiction, explaining that a non-US corporation is subjected to general jurisdiction in New York if it is doing business in the state and its contacts are so continuous and systematic as to render it essentially “at home” there. New York Courts may also assert general jurisdiction over a non-US parent company if it has a domestic "agent" that renders services of sufficient importance to the non-US parent in the state. Finally, New York Courts may assert general jurisdiction over a non-US company when its in-state domestic affiliate is so dominated by the defendant as to be its “alter ego.”

The Court found that the "doing business" standard was not satisfied, as plaintiffs did not allege that the defendants’ operations in New York were "so substantial and of such a nature as to render the corporation at home in that State." The agency standard could not be applied, as even if Oriental NY could be characterized as the non-US defendants' domestic agent, its activities in the New York were insufficient to overcome the due process concerns posed by haling non-US companies into an American Court. However, the Court acknowledged the possibility that plaintiff might demonstrate jurisdiction under an alter-ego theory, and ordered discovery to determine how the Oriental Gemco companies were in fact interrelated.

The Court then examined specific jurisdiction. It explained that in order to establish specific jurisdiction, the plaintiff must demonstrate that its claim arises out of, or relates to, the defendant's contacts with the forum and the exercise of jurisdiction must comport with the Due Process Clause of the US Constitution. The Court stated that the reasonableness inquiry required that it consider (1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering substantive social policies.

The Court concluded that, to establish specific personal jurisdiction, Plaintiff Meira T. would need to show either the that the non-US Oriental Gemco companies or their agents committed tortious acts in New York or that Oriental NY committed tortious acts in New York as the non-US defendants’ agent. Meira T. alleged that the non-US Defendants "attend trade shows in New York, Las Vegas and Hong Kong at least four times a year,” and the Court granted jurisdictional discovery to establish whether those contacts involved the commission of tortious acts in New York.

District Court Finds Defendants Judicially Estopped From Arguing that Personal Jurisdiction Existed Where Defendants Had Consistently Taken the Contrary Position in a Previous Action

Katherine Elizabeth Barnet, et al. v. Drawbridge Special Opportunities Fund LP, et al., US District Court for the Southern District of New York, October 17, 2014

Plaintiffs are the Court-appointed liquidators of members of the Octaviar Group, a group of now-insolvent Australian corporations. Plaintiffs’ claims arose out of an alleged fraudulent conveyance of approximately AU$200,000,000 from the Octaviar Group to Australian affiliates of Defendant Fortress Investment Group LLC. The Liquidators commenced litigation against the Australian affiliates of Fortress. Throughout that proceeding, in their briefing and in Court appearances, Defendants consistently maintained that there would be no personal jurisdiction over them or any of their US affiliates in Australia, and the Australian Courts agreed.

The liquidators subsequently brought this action based on the same underlying facts as the Australian case. Defendants moved to dismiss based on the doctrine of forum non conveniens. The Court denied the motion, and in a later order denied Defendants’ request to dismiss or stay the case based on principles of international comity. In its decision, the Court noted that because Defendants had consistently taken the contrary position in the Australian litigation (i.e., that there would be no personal jurisdiction over them or any of their U.S. affiliates in Australia), they could not argue to the US Courts that jurisdiction in Australia was available. The absence of an alternative remedy in Australia thus argued in favor of the Court retaining jurisdiction.

In the present order, Defendants sought reconsideration. The Court denied the request, stating that it had correctly addressed the issues in its previous orders.

Court of Appeals Affirms Jurisdiction Over Non-US Corporations and Individual, Applying Tort Standard in Fraud Claim Involving Unfunded Loan Agreement

Niemi v. Burgess, US Court of Appeals for the Tenth Circuit, November 4, 2014.

Individual Plaintiffs formed a joint venture for a large scale-development project in Breckenridge, Colorado. They alleged that Defendants, an individual domiciled in Austria, two affiliated Austrian companies, and a Panamanian company, perpetrated a fraudulent financing scheme that ultimately led to the collapse of the project.

The district Court rejected Defendants challenges to personal jurisdiction, among other issues considered, and entered a default judgment of approximately $185 million in favor of Plaintiffs. The Court of Appeals affirmed the district Court’s decision in part, but, as relevant here, reversed as to personal jurisdiction over one of the Austrian companies because it did not exist until a year after the latest events underlying the suit. In affirming the district Court’s exercise of personal jurisdiction, the Court of Appeals found that Plaintiff had not only satisfied its obligation to make out a prima facie showing of personal jurisdiction, but had done so by a preponderance of evidence.

Noting that Colorado’s long-arm statute was co-extensive with the Due Process Clause of the US Constitution, the Court of Appeals reviewed only that federal standard. Both parties agreed that “general personal jurisdiction” did not exist here. Rather, “specific personal jurisdiction” was asserted, with the Court considering the different implementation of that standard in the context of contract cases and tort cases. Rejecting Defendants’ view that the case should be treated as one in contract because of the unfunded loan agreement, the Court of Appeals employed the “purposeful direction” test used for assessing special personal jurisdiction in fraud cases. That test requires “(a) an intentional action…that was (b) expressly aimed at the forum state…with (c) knowledge that the brunt of the injury would be felt in the forum state.” Defendants did not contest that their actions were intentional. As to the other elements, the Court of Appeals found that Defendants’ interactions with Plaintiffs (Colorado residents), the Loan Agreement with Colorado entities, and the location of the project made clear that “the fraudulent financing scheme was expressly aimed at Colorado, and that it was equally the effects of the project’s failure would be felt mainly in Colorado.” Defendants also argued that Plaintiffs had limited interactions with the Austrian individual, and that he was an agent of one of the corporations and thus not subject to personal jurisdiction based on contacts on behalf of that corporation. The Court of Appeals dismissed both arguments, finding that the individual’s communications with Plaintiffs made clear that he was intentionally directing tortious action at Colorado, and that his status as an employee did not insulate him from personal liability where he had allegedly been a “primary participant” in the fraud. Lastly, in light of Defendants’ failure to present any considerations that would render jurisdiction unreasonable, the Court of Appeals determined that the district Court’s exercise of personal jurisdiction did not offend “traditional notions of fair play and substantial justice.”

District Court Grants Additional Jurisdictional Discovery on Norwegian Defendant’s Secondment Agreements With US Entities

Patterson v. Blue Offshore BV, et al., US District Court for the Northern District of California, November 10, 2014

Plaintiff Danny Patterson, alleging that he injured his knee and leg while working on a ship then located off the coast of the Russian Federation, brought suit against contractors providing equipment and technical supervision on the project on which he sustained his injury. In particular, he alleged that defendant FMC Kongsberg Subsea AS, a Norwegian contractor, provided unsafe sub-sea umbilical equipment.

FMC Kongsberg moved to dismiss for lack of personal jurisdiction, and Patterson moved to conduct additional jurisdictional discovery of secondment agreements under which FMC Kongsberg’s employees were placed on projects in the United States. FMC Kongsberg opposed this motion, claiming that it lacked minimum contacts with the forum sufficient to warrant the discovery. The Court found that the agreements might reveal contacts between FMC Kongsberg and the forum that could support specific personal jurisdiction.

District Court Exercises Personal Jurisdiction Over Defendant Non-US Executive Who Operated an Affiliate Corporation in the Forum State

Pearson Education, Inc., et al. v. Hotfile Corp., et al., US District Court for the Southern District of Florida, October 29, 2014

Defendant Hotfile, a Panamanian corporation, formerly operated an online “storage locker” which allowed users to upload and share digital content. No restriction was placed on the type of content that could be uploaded and subsequently downloaded by Hotfile’s users; as a result, a large percentage of the files transferred through the Hotfile service proved to be unauthorized copies of copyrighted works. Plaintiffs, five of the largest textbook publishing companies in the United States, commenced an action alleging that Defendants intentionally and willingly allowed for, encouraged, and profited from the illegal download and distribution of their copyrighted works and were thus vicariously liable for the copyright infringement committed by Hotfile users. Defendant Anton Titov—a Russian citizen living in Bulgaria—was a central figure in Hotfile’s ownership and operation, and challenged the Court’s jurisdiction over him. Plaintiffs asserted that Titov’s extensive involvement with Hotfile, as well as its internet service provider-affiliate Lemuria Communications, Inc., a Florida corporation, were sufficient to confer general jurisdiction over Titov.

The Court addressed personal jurisdiction using a two-part test: first, the Court must determine whether the Florida long-arm statute provides a sufficient basis for personal jurisdiction, then must ascertain whether sufficient minimum contacts exist between the defendant and the forum state so as to satisfy traditional notions of fair play and substantial justice under the Due Process Clause of the Fourteenth Amendment.

The Court found that jurisdiction was proper under the Florida long-arm statute because Titov was instrumental in the organization, maintenance, and operation of the Hotfile enterprise, a business operating in Florida. Coupled with Titov’s continued operation of a Florida corporation, the facts were sufficient to find jurisdiction under Florida’s general jurisdiction statute. The Court also found that sufficient minimum contacts existed between Titov and the forum state to satisfy the Due Process Clause: it was determined that Titov was a high-ranking, central figure at Hotfile, who was critical to the company’s formation and maintenance, and that he personally had a hand in every aspect of the conduct underpinning Plaintiffs’ theories of liability. The Court found that although Titov resided in Bulgaria, he could reasonably expect to be sued in the US for the allegedly pervasive infringement activities of a business operating there. While the burden on Titov could be substantial, the other factors overwhelmingly favored the exercise of jurisdiction.

District Court Concludes That Substantive Geographical Limitations on Securities Laws Do Not Affect Personal Jurisdiction Analysis

Securities and Exchange Commission v. Spencer Pharmaceutical, Inc., US District Court for the District of Massachusetts, November 14, 2014.

The defendant Jean-Francois Amyot, a Canadian citizen, was alleged by the SEC to have engaged in securities fraud in connection with the establishment of Spencer Pharmaceutical and the promotion and sale of its stock. Amyot argued that the Court lacked personal jurisdiction over him. The SEC’s claim was based on an alleged violation of a federal statute providing for nationwide service of process and for venue in any district any act or transaction constituting the violation occurred. In such cases, the Court observed, personal jurisdiction over the defendant required that he have minimum contacts with the US as a whole, not with the district where the trial would take place. Against this background, the Court had little difficulty in concluding that the conduct Amyot was alleged to have engaged in—including the establishment of US companies, the maintenance of US offices, and the allegedly fraudulent US press releases—satisfied the US constitutional requirement that the claim at issue be “related” to the defendant’s US-based conduct, and that the conduct reveal that the defendant had “purposefully and voluntarily” directed his activities toward the US so that he should expect that he might be held accountable for them in a US Court.

Amyot’s principal argument was that the US Supreme Court’s 2010 decision in Morrison v. National Australian Bank Ltd. established a higher threshold for personal jurisdiction. In that case, the Supreme Court identified limitations on the applicability of the US securities laws to conduct occurring wholly or partially outside the US. The District Court disagreed, noting that Morrison related to the substantive elements of a violation, not whether a Court could exercise personal jurisdiction over a particular defendants. The Court thus denied Amyot’s motion to dismiss the complaint on grounds of personal jurisdiction, and reserved for trial further issues relating to the elements of a violation that the SEC would be required to prove.

[Editor’s Note: The Spencer Pharmaceutical case is also addressed in the Securities Law section of this report.]

District Court Concludes That the PLO and the Palestinian Authority Should Be Considered “At Home” in the US for Purposes of Asserting General Personal Jurisdiction Over Them

Sokolow v. The Palestinian Liberation Organization, US District Court for the Southern District of New York, December 1, 2014

In 2004, defendants Palestinian Liberation Organization (PLO) and the Palestinian Authority (PA) were sued in federal Court in New York by plaintiffs alleging violations of the ATS in connection with injuries they suffered as a resulting of bombings in Israel. In 2011, the US District Court in New York ruled that it had general personal jurisdiction over the PLO and the PA based upon their “systematic and continuous contacts and activities with the United States,” and in light of the strong US policy to have ATS claims litigated in the US and the absence of an alternative forum. The defendants renewed their motion in light of the 2014 decision of the US Supreme Court in Daimler AG v. Bauman, which stated in the context of a claim under state law that general personal jurisdiction should be limited to situations in which an entity is essentially “at home” in the jurisdiction. In the case of a corporation, that test is satisfied in all but “exceptional cases” in the state where the entity is incorporated or has its principal place of business.

The Court noted that the PA had identified as a place where it might be “at home” the “Palestinian Territories in the West Bank and Gaza Strip," and that the PLO had identified no region. It thus concluded that the defendants had failed to establish that the US was not an appropriate forum for the litigation. The Court also conducted a “comity analysis” and concluded that the assertion of personal jurisdiction over the defendants did not conflict with any non-US country’s “applicable law or national interests.

Laws Discussed

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.

Antiterrorism Act, 18 U.S.C. § 2331 et seq

The Antiterrorism Act creates criminal penalties and civil liability for various forms of terrorist activities committed against US nationals or on US soil. The statute is notable for its civil remedy allowing for the recovery of three-times damages plus attorneys’ fees, as well as an extended statute of limitations.

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 Corrupt Practices Act (FCPA”), 15 U.S.C. §§ 78dd-1, et seq.

The US anti-corruption statute, passed in 1977, generally makes unlawful:

  • Paying, offering to pay, promising to pay, or authorizing to pay,
  • Anything of value,
  • Corruptly,
  • To any third party (including local consultants & joint venture partners),
  • Knowing that some of it will be given to a “foreign official,”
  • To influence the official to confer a commercial benefit of any kind upon the payor.

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.

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Orrick, Herrington & Sutcliffe LLP
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