How long does the long arm of American jurisdiction last?
A wide range of federal laws apply to driving abroad. When these laws include private rights of action, Americans can end up with claims against defendants with little or no ties to the United States.
Since the decision of the Supreme Court of the United States in Daimler vs. Bauman Reducing the power of states to bring non-resident companies to justice for conduct unrelated to their business in the state, many assumed these potential claimants were out of luck.
Now in Douglass v. Nippon Yusen Kabushiki Kaisha, the Fifth Circuit has decided to reconsider whether and how this rule applies when federal courts hear federal law claims against foreign-based companies.
Long-armed statutes subject to due process limitations
The personal jurisdiction of federal courts generally depends on the long-standing statutes of the states in which they sit. These laws are subject to the due process clause of the 14th Amendment, which limits state jurisdiction over non-resident defendants to situations where claims against them arise out of, or relate to, their conduct in the state.
But federal law has its own long-handed provisions, governed by the Fifth Amendment, which seek to fill loopholes in state law.
Although the due process clauses of the Fifth and Fourteenth Amendments are worded similarly, the Supreme Court has done its utmost, in cases like Bristol-Myers Squibb v. Superior court, to leave open if the clauses impose the same constraints. And the government argued, more recently in the last term in Ford v. Montana Eighth judicial district. Ct., that the “unique constitutional prerogatives and powers” of the United States allow “the exercise of federal judicial power in a manner that has no analogy at the state level”.
Yet most federal courts of appeal, including the first, second, fourth, fifth, sixth, ninth, tenth, eleventh, federal and DC circuits, have assumed or held without much analysis that the federal provisions on the service of pleadings are subject to the same limits as their state law counterparts. The only difference they recognized is that litigants proceeding under the federal procedural service provisions can consolidate defendants’ contacts with the United States as a whole, instead of a single state.
Questions to answer
It is worth asking why. After all, a central rationale for the emphasis on forum contacts under the 14th Amendment is the need to protect interstate federalism. But federalism is irrelevant when a federal court hears federal law complaints against, for example, a foreign terrorist organization that injures Americans traveling abroad or a foreign company that traffics goods overseas. confiscated from US citizens. And it’s not clear how much of the downside the litigation here places on non-resident foreign defendants should weigh against Congress’ judgment that Americans should be able to sue based on foreign behavior.
These are among the questions that the Fifth Full Circuit will consider during rehearsals Douglass.
Facts of the matter: collision in Japanese waters
The call stems from a collision in Japanese waters on June 17, 2017 between the US Navy destroyer USS Fitzgerald and a cargo ship (MV ACX Crystal) chartered by a Japanese shipping company that left seven dead and dozens injured among American sailors. In consolidated cases, the victims and their survivors sued the company under the Federal High Seas Death Act. They asserted their personal jurisdiction under the Federal Civil Procedure Rule 4 (k) ( 2), which allows for the service of proceedings in federal legal proceedings where the defendant is not subject to the jurisdiction of any state.
Finding no connection between the accident and the shipping company’s limited contacts in the United States, the district court dismissed the lawsuits under Daimler. A Fifth Circuit panel reluctantly asserted, devoting much of its per curiam opinion to casting doubt on a Circuit precedent that subjected Rule 4 (k) (2) to the same 14th Amendment standard as its counterparts in the State Law. The two active judges on the panel agreed, urging the entire court to reconsider the matter. He agreed to do it on July 2.
How far will the fifth circuit go?
With virtually no guidance from the Supreme Court, the case promises to bring the predominantly conservative appeals court back to first principles. This could lead to some interesting debates about federal power, sovereignty, and what it means to be true to the text of the US Constitution. And that could make the Fifth Circuit, which includes Louisiana, Mississippi, and Texas, the premier forum for federal claims against non-resident foreign corporations.
While it is impossible to predict the outcome, it seems unlikely that the court took the case as a bench just to uphold its precedent. The question is, how far will it go?
The now overturned panel decision gives a clue: it endorsed a compromise position suggested by an amicus brief from civil procedure academics who would read the Fifth Amendment to allow jurisdiction over foreign companies for claims based on a foreign behavior related to their operations in the United States. . But the tribunal could go further and hold, as the government’s brief in Ford suggested that the Constitution not impose any territorial constraints on the federal authority.
Whatever the outcome, the Supreme Court will certainly face appeals for a ruling before long.
This column does not necessarily reflect the opinion of the Bureau of National Affairs, Inc. or its owners.
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Eugene Sokoloff is a lawyer at MoloLamken LLP where he focuses on queries and critical appeals.