University of Georgia School of LawDigital Commons @ Georgia Law

Books Faculty Scholarship

4-11-2018

International Civil Litigation in United StatesCourts (6th edition)Gary B. Born

Peter B. RutledgeUniversity of Georgia Law School, borut@uga.edu

Follow this and additional works at: https://digitalcommons.law.uga.edu/books

Part of the Dispute Resolution and Arbitration Commons, International Law Commons,International Trade Law Commons, and the Litigation Commons

This Book is brought to you for free and open access by the Faculty Scholarship at Digital Commons @ Georgia Law. It has been accepted for inclusionin Books by an authorized administrator of Digital Commons @ Georgia Law. Please share how you have benefited from this access For moreinformation, please contact tstriepe@uga.edu.

Repository CitationBorn, Gary B. and Rutledge, Peter B., "International Civil Litigation in United States Courts (6th edition)" (2018). Books. 143.https://digitalcommons.law.uga.edu/books/143

PREFACE TO THESIXTH EDITION

The law governing international civil litigation has changed dramatically since the lastedition was published. The Supreme Court continues to shape the jurisprudence infields such as personal jurisdiction, sovereign immunity, and extraterritoriality. Thiscurrent edition reflects those changes and raises important questions about the broaderimplications of those decisions.

Of course, the Supreme Court still only decides a tiny fraction of cases where review issought, and the field of international dispute resolution is no exception. Consequently,much of the law in this area (like others) is shaped by the lower federal courts and statecourts. Additionally, other branches of government play a critical role. For example, theExecutive Branch shapes the law through its litigating positions (to which courts maydefer) or through its assertion that a particular legislative enactment (or lawsuit)intrudes upon its foreign affairs power. State legislatures too can influence the law inthis area through enactments that stretch the boundaries of their authority. The currentedition aims to capture those trends, identify emerging splits in authority, and critiquethe doctrine.

Developments in this field are of course not limited to the United States, andcomparative knowledge is essential to this field. While this book focuses primarily onUnited States law, the current edition deliberately incorporates more excerpts, moreextensive references, and more questions concerning foreign law, especially Europeanlaw. This includes recent developments in areas such as judicial jurisdiction, parallelproceedings, and judgment enforcement. In part, this reflects an intellectual desire tostimulate comparative thinking. It also reflects an important reality — known to manypractitioners but perhaps less well known to the students — that successful practice inthis area, even for the United States lawyer, increasingly requires a keen understandingof other legal systems. Whether the matter concerns judicial jurisdiction, theenforceability of forum selection, arbitration or choice-of-law clauses, the extraterritorialeffect of legislation or the enforcement of judgments and arbitration awards, smarttransactional lawyers must comprehend those differences even before a transaction isconsummated. Moreover, when disputes do arise, savvy litigators must appreciatedifferences between legal systems in order to develop a sound strategy regarding theforum in which a dispute will be resolved. Developments in the different rules governingforum non conveniens, lis alibi pendens, and antisuit injunctions, all examined in thisedition, illustrate the need for a deep comparative understanding. The extensivelyreferenced documents — treaties, statutes, the Federal Rules of Civil Procedure, a

xxxv

growing (and changing) body of European Union Law — are all contained in a separateDocumentary Supplement available for download at http://www.wklegaledu.com/Born-InternationalCivilLitigation6 (password: Born6e).

Once again, this current work would not have been possible without the support ofcountless individuals. While the complete list would be too numerous to reproducehere, we must once again acknowledge the exceptional support of Steve Burbank, at theUniversity of Pennsylvania Law School, who has used this book for many years; thiscurrent edition has benefited greatly from his penetrating insights. Several colleagues,especially Marc Lee and Caroline Savini, along with Shouvik Bhattacharya, XavierBrown, Wen-Chuan Dai, Shaudie Fassih, Kevin Huber, Amanda Newton, Nils Okeson,and Victoria Smith have provided invaluable assistance. Cindy Wentworth also helpedwith the preparation of the manuscript in numerous ways. Finally, we would like tothank the entire team at Aspen Publishers and Wolters Kluwer, and especially MaxDonnewald, Troy Froebe, and Kathy Langone of The Froebe Group, for their support.

Corrections, comments and questions are encouraged, and can be sent by email togary.born@kluwerlaw.com.

Gary B. BornLondon, England

Peter B. RutledgeAthens, Georgia

January 2018

xxxvi Preface to the Sixth Edition

Contents

Preface to the Fifth Edition xxxiiiPreface to the Sixth Edition xxxvAcknowledgments xxxvii

PART ONEJUDICIAL JURISDICTION

1

Jurisdiction of U.S. Courts over Subject Matter in International Disputes 5

A. Introduction 51. Plenary State Subject Matter and Legislative Jurisdiction 52. Limited Federal Legislative and Subject Matter Jurisdiction 5

a. Limited Federal Legislative Authority Under Article I 5b. Limited Federal Judicial Authority Under Article III 7

3. Overview of Federal Subject Matter Jurisdiction in International Cases 7a. Article III’s Grants of Subject Matter Jurisdiction 7b. Statutory Grants of Federal Subject Matter Jurisdiction 8c. Removal 9d. Practical Considerations Relevant to Federal Subject Matter

Jurisdiction 94. Relationship Between U.S. State and Federal Law 10

a. The Erie Doctrine 10b. Substantive Federal Common Law 11

5. Relationship Between International Law and U.S. Law 13a. International Law 14b. Relationship Between International Agreements and U.S. Law 15c. Relationship Between Customary International Law and U.S. Law 17d. Presumption That Congressional Legislation Is Consistent with

International Law 186. Separation of Powers Considerations 18

xiii

B. Alienage Jurisdiction of Federal Courts 211. Introduction and Historical Background 212. Contemporary Statutory Grants of Alienage Jurisdiction 22

a. Section 1332(a)(2) 22b. Section 1332(a)(3) 23

Hercules Inc. v. Dynamic Export Corp. 24Notes on Hercules v. Dynamic 25

C. Federal Question Jurisdiction in International Cases 301. Introduction and Historical Background 30

a. Article III’s Grant of Federal Question Jurisdiction 30b. Statutory Grants of Federal Question Jurisdiction 30

2. Jurisdiction of Federal Courts Under the Alien Tort Statute 32a. The Alien Tort Statute 32b. Filartiga and Tel-Oren 33c. Sosa and Kiobel 34

Filartiga v. Pena-Irala 35Sosa v. Alvarez-Machain 37Torture Victim Protection Act 46Notes on Filartiga, Sosa, and TVPA 46

3. Federal Question Jurisdiction in Cases Arising Under InternationalLaw and Federal Common Law 61Restatement (Third) Foreign Relations Law of the United States §111 (1987) 62Filartiga v. Pena-Irala 62Sequihua v. Texaco, Inc. 62Notes on Third Restatement §111, Filartiga, and Sequihua 64

4. Sovereign Immunity and Judicial Jurisdiction Under the ForeignSovereign Immunities Act 70Verlinden BV v. Central Bank of Nigeria 70Notes on Verlinden 75

2

Jurisdiction of U.S. Courts over Parties to International Disputes 79

A. Introduction and Historical Background 791. Statutory and Constitutional Requirements for Exercise of Personal

Jurisdiction 79a. Statutory Authorization for the Exercise of Judicial Jurisdiction 80

(1) State Long-Arm Statutes 80(2) Federal Long-Arm Statutes and Rules 81

b. Due Process Limits on Judicial Jurisdiction: HistoricalOverview and Vocabulary 81

(1) Territorial Sovereignty and Pennoyer v. Neff 82(2) International Shoe and ‘‘Minimum Contacts’’ 84(3) Hanson v. Denckla and ‘‘Purposeful Availment’’ 85(4) World-Wide Volkswagen and Contemporary Due Process

Analysis: ‘‘Purposeful Contacts’’ and ‘‘Reasonableness’’ 86(5) The Reemergence of Territorial Sovereignty:

Asahi, Burnham, and Nicastro 86

xiv Contents

c. ‘‘General’’ and ‘‘Specific’’ Jurisdiction 88d. Procedural Posture of Litigation over Personal Jurisdiction 89

2. Selected Materials on the Foundations of Personal Jurisdiction 89Pennoyer v. Neff 89Restatement (First) Conflict of Laws §47 (1934) 89World-Wide Volkswagen Corp. v. Woodson 92Restatement (Third) Foreign Relations Law of the United States (1987) §421 92French Civil Code, Article 14 94European Council Regulation 1215/2012 94Notes on Pennoyer, World-Wide Volkswagen, and Legislative

Materials 94B. General Jurisdiction of U.S. Courts in International Cases 106

1. General Jurisdiction Based on Nationality, Domicile, or Residenceof the Defendant 106Blackmer v. United States 107Notes on Blackmer 108

2. General Jurisdiction Based on Incorporation or Registrationto Do Business 111

a. Incorporation 111b. Registration or Qualification to Do Business 111

Bauman v. Daimler AG 112Notes on Bauman 115

3. General Jurisdiction Based on Consent or Waiver 117a. Prorogation Agreements or Nonexclusive Forum Selection

Agreements 117b. Implied Submissions to Jurisdiction 118

4. General Jurisdiction Based on Personal Service During theTransitory Presence of the Defendant Within the Forum 118C.S.B. Commodities, Inc. v. Urban Trends (HK) Ltd. 119Oyuela v. Seacor Marine (Nigeria), Inc. 122Notes on CSB Commodities and Oyuela 123

C. Specific Jurisdiction of U.S. Courts over Foreign Defendants 1271. Specific Jurisdiction in International Product Liability and Tort Cases 127

a. Purposeful Contacts and the Stream of Commerce Doctrine 128b. Reasonableness 129c. Defining the Forum ‘‘State’’: A Preliminary View 129

Asahi Metal Industry Co. v. Superior Court of California, Solano County 130J. Mcintyre Machinery, Ltd. v. Nicastro 134Notes on Asahi and Nicastro 140

2. Specific Jurisdiction in International Contract Disputes 152Afram Export Corp. v. Metallurgiki Halyps, SA 153Benton v. Cameco Corp. 155Notes on Afram Export and Benton 159

D. Jurisdiction Based on Corporate Affiliations or Agency Relationships 1651. Personal Jurisdiction Based on Alter Ego Status 166

a. Law Governing Alter Ego Status 166b. Cannon Manufacturing: The Importance of Corporate Formalities 168c. Alternative Alter Ego Standards 169

In re Telectronics Paper Systems, Inc. 171

Contents xv

Notes on Telectronics 1742. Personal Jurisdiction Based on Agency Relationship 180

a. Law Governing Agency Relationship for Jurisdictional Purposes 180b. Agency Standards for Jurisdictional Purposes 180c. Selected Materials on Agency as a Basis for Personal Jurisdiction in

International Cases 182Frummer v. Hilton Hotels International 182Cartwright v. Fokker Aircraft U.S.A., Inc. 184Notes on Hilton Hotels and Fokker 185

E. Personal Jurisdiction in Federal Courts: Federal Rule of Civil Procedure 4and the Due Process Clauses 189

1. Introduction 189a. Federal Rule of Civil Procedure 4: Amenability and Manner of

Service Distinguished 189b. Rule 4(k)’s Jurisdictional Grants: An Overview 190c. No Federal Personal Jurisdiction Without Legislative

Authorization: Omni Capital 190d. Due Process Limits: ‘‘State’’ or ‘‘National’’ Contacts? 191

2. Federal Long-Arm Statutes Granting Jurisdiction Based on aForeign Defendant’s National Contacts 192Pinker v. Roche Holdings, Ltd. 192J. McIntyre Machinery, Ltd. v. Nicastro 195Notes on Pinker 195

3. Borrowed State Long-Arm Statutes Under Rule 4(k)(1)(A)and the Due Process Clauses 201

4. Personal Jurisdiction Under Rule 4(k)(2) 202Federal Rules of Civil Procedure, Rules 4(K)(1)(A) & 4(K)(2) 202United States v. Swiss American Bank, Ltd. 202Notes on Rule 4(k) and Swiss American Bank 206

3

Foreign Sovereign Immunity and Jurisdiction of U.S. Courtsover Foreign States 215

A. Introduction 2151. Historical Background 2152. The Foreign Sovereign Immunities Act of 1976: Overview 2183. International Recognition of the Restrictive Theory of Foreign

Sovereign Immunity 2194. Selected Historical Materials Concerning Foreign Sovereign Immunity 219

The Schooner Exchange v. McFaddon 220Berizzi Bros. Co. v. SS Pesaro 221Republic of Mexico v. Hoffman (The Baja California) 223Letter of Acting Legal Adviser, Jack B. Tate, to Department of Justice,

May 19, 1952 224Foreign Sovereign Immunities Act of 1976 225Republic of Austria v. Altmann 225U.N. Convention on Jurisdiction Immunities of States and

Their Property 228

xvi Contents

Notes on Schooner Exchange, Pesaro, Republic of Mexico,Tate Letter, FSIA, Altmann, and U.N. State Immunities Convention 228

B. Entities Entitled to Immunity Under the FSIA 2341. Foreign States Proper 2342. Foreign State ‘‘Political Subdivisions’’ 2363. Agencies and Instrumentalities of Foreign States 2364. Separate Legal Identities of Foreign Government Entities and

Grounds for Disregarding 2375. Foreign Heads of State and State Officials 2376. Selected Materials on Foreign State Entities 238

Dole Food Co. v. Patrickson 238First National City Bank v. Banco Para el Comercio Exterior de Cuba 240Samantar v. Yousuf 244Notes on Dole Food, Bancec and Samantar 248

C. Bases for Judicial Jurisdiction over Foreign States Under the FSIA 2591. Commercial Activity with a U.S. Nexus 260

a. Definition of ‘‘Commercial Activity’’ 261Republic of Argentina v. Weltover, Inc. 262MOL, Inc. v. People’s Republic of Bangladesh 266Notes on Weltover and MOL 267

b. The ‘‘Based Upon’’ and ‘‘In Connection’’ Requirements 271Saudi Arabia v. Nelson 272Notes on Nelson 280

c. The ‘‘Nexus’’ Requirements 283Republic of Argentina v. Weltover, Inc. 284Saudi Arabia v. Nelson 285Notes on Weltover and Nelson 285

2. Noncommercial Torts Occurring Within the United States 293a. Situs Requirement for Noncommercial Torts 295

In re SEDCO, Inc. 295Olsen ex rel. Sheldon v. Government of Mexico 296Notes on SEDCO and Olsen ex rel. Sheldon 298

b. The Discretionary Function Exclusion for Noncommercial Torts 299In re SEDCO, Inc. 301Letelier v. Republic of Chile 301Notes on SEDCO and Letelier 302

c. The ‘‘Scope of Employment’’ Requirement 304Liu v. Republic of China 305Notes on Liu v. Republic of China 307

3. Expropriation with a U.S. Nexus 309Siderman de Blake v. Republic of Argentina 309Notes on Siderman de Blake 313

4. Waiver of Sovereign Immunity 320Verlinden BV v. Central Bank of Nigeria 321Cargill Int’l, SA v. M/T Pavel Dybenko 325Notes on Verlinden and Cargill 326

5. Terrorism-Related Acts 335Price v. Socialist People’s Libyan Arab Jamahiriya 337Notes on Price 341

Contents xvii

PART TWOCHOICE OF FORUM

4

Forum Non Conveniens in International Litigation 349

A. Introduction and Background 3501. Common Law Origins of Forum Non Conveniens Doctrine 3502. Gulf Oil Co. v. Gilbert and Koster v. American Lumbermens

Mutual Casualty Co. 3533. Section 1404(a) — Domestic Forum Non Conveniens Statute 355

B. The Modern Forum Non Conveniens Doctrine: Basic Principles 356Piper Aircraft Co. v. Reyno 357Dow Chemical Co. v. Castro Alfaro 362Notes on Piper and Castro Alfaro 368

C. Deference to the Plaintiff’s Choice of Forum 378Iragorri v. United Technologies Corp. 378Notes on Iragorri 381

D. The ‘‘Private and Public Interest’’ Factors 393Piper Aircraft Co. v. Reyno 393Howe v. Goldcorp Investments, Ltd. 393Harrison v. Wyeth Laboratories Division of American Home

Products Corp. 397Notes on Piper, Howe, and Wyeth 399

E. The Adequate Alternative Forum Requirement and Public PolicyRestrictions 410

1. Adequate Alternative Forum Requirement 4102. Public Policy as a Basis for Denying Forum Non Conveniens

Dismissals 4113. Conditions on Dismissals 4134. Selected Materials on Adequate Alternative Forums, Public Policy,

and Conditions 413In re Union Carbide Corporation Gas Plant Disaster at Bhopal,

India in December, 1984 413Howe v. Goldcorp Investments, Ltd. 416Laker Airways Ltd. v. Pan American World Airways 416Harrison v. Wyeth Laboratories 418Wiwa v. Royal Dutch Shell Petroleum Co. 419Ecuadorian Law 55 421Model Blocking Statute Adopted by Parlatino 421Notes on Bhopal, Howe, Laker, Wyeth, Wiwa, and Legislative

Materials 421F. The Contemporary Forum Non Conveniens Doctrine: Applicable

Law and the Erie Doctrine 437Sequihua v. Texaco, Inc. 439Notes on Sequihua 439

G. Venue in International Litigation in U.S. Courts 443

xviii Contents

5

International Forum Selection Agreements 445

A. Introduction and Historical Background 4461. Exclusive and Nonexclusive Forum Selection Agreements 4462. Reasons for Entering into Forum Selection Agreements 4473. Historical Development of Enforceability of Forum Selection

Agreements 448a. Historic U.S. Common Law Rule That Forum Selection

Agreements Are Unenforceable 449b. Rejection of the Historic Rule That Forum Selection

Agreements Are Unenforceable 449c. Restatement (Second) Conflict of Laws 451d. Hague Convention on Choice of Court Agreements 452

B. Contemporary Approaches to Forum Selection Agreements inInternational Cases 452

1. Contemporary Approaches to Enforceability of Forum SelectionAgreements 453

a. Forum Selection Agreements Per Se Unenforceable 453b. Forum Non Conveniens Analysis 454c. Forum Selection Agreements Enforced If ‘‘Reasonable’’ 454d. Forum Selection Agreements Enforced as Contracts 455e. New York General Obligation Law §5-1402 455

2. Forum Selection Agreements Involving Consumers and Insureds 4563. Selected Materials on Approaches to the Enforceability of

International Forum Selection Agreements 456Kahn v. Tazwell 456Montana Code Annotated 457The Bremen v. Zapata Off-Shore Co. 457Smith, Valentino & Smith, Inc. v. Superior Court 461New York General Obligations Law §§5-1401 & 1402 464European Union Council Regulation 1215/2012, Art. 25 464Hague Convention on Choice of Court Agreements 464Notes on Tazwell, Bremen, Smith, and Legislative Materials 464

C. Grounds for Resisting Enforcement of Forum Selection Agreements 4701. Introduction 4702. Defects in Formation and Other Contract Law Defenses as

Grounds for Resisting Enforcement of Forum Selection Agreements 470Colonial Leasing Co. of New England v. Pugh Brothers Garage 471Carnival Cruise Lines, Inc. v. Shute 472European Union Council Regulation 1215/2012, Arts. 10-25 475Hague Convention on Choice of Court Agreements (2005), Arts. 2, 3, 5 & 6 475Notes on Colonial Leasing, Carnival Cruise, and Legislative Materials 475

3. Unreasonableness as a Ground for Resisting Enforcement ofExclusive and Nonexclusive Forum Selection Agreements 482

a. Unreasonableness or Inconvenience as Grounds for ResistingEnforcement of Exclusive Forum Selection Agreement 482

b. Unreasonableness or Inconvenience as Grounds for ResistingEnforcement of Nonexclusive Forum Selection Agreement 485

Contents xix

Copperweld Steel Co. v. Demag-Mannesmann-Boehler 485New York General Obligations Law §5-1402 487European Union Council Regulation 1215/2012, Art. 25 487Hague Convention on Choice of Court Agreements (2005) 487Notes on Copperweld and Legislative Materials 487

4. Public Policy as a Ground for Resisting Enforcement of ForumSelection Agreement 495

a. Introduction 495b. Sources of Public Policy 495c. Selected Materials on Public Policy 498

The Bremen v. Zapata Off-Shore Co. 498Richards v. Lloyd’s of London 499Notes on Bremen and Richards 504

D. Enforceability of Forum Selection Agreements: Applicable Law inU.S. Courts 511

1. Introduction 5112. Approaches to Selecting Law Applicable to Enforceability of

Forum Selection Agreements 513a. Bremen: A Federal Common Law Rule Governing Enforceability

of Forum Selection Agreements in Admiralty Cases 513b. Section 1404(a) Governs Enforceability in Federal Courts of

Forum Selection Agreements Selecting Other Federal Forums 513c. Erie Problems: Does State or Federal Law Govern Enforceability

of Forum Selection Agreements in Federal Diversity Actions? 515d. Choice-of-Law Rules Applicable to Select Law Governing

Enforceability of Forum Selection Agreements 515e. Choice of Law Under Hague Choice of Court Agreements

Convention 5163. Selected Materials on Law Applicable to Enforceability of

Forum Selection Agreements 516Royal Bed & Spring Co. v. Famossul Industria e Comercio de Moveis Ltda 516Instrumentation Associates, Inc. v. Madsen Electronics (Canada) Ltd. 519Notes on Royal Bed and Madsen Electronics 521

E. Scope of Forum Selection Agreements 528

6

Parallel Proceedings: Lis Alibi Pendens and Antisuit Injunctions 531

A. Introduction to Parallel Proceedings 532B. The Lis Alibi Pendens Doctrine 532

1. Introduction 5322. Colorado River: ‘‘Unflagging Obligation’’ to Exercise Jurisdiction 5343. Landis: Stays Within the District Court’s ‘‘Sound Discretion’’ 5354. Quackenbush: ‘‘Unflagging Obligation’’ Reaffirmed 5365. Selected Materials on Lis Alibi Pendens 536

Ingersoll Milling Machine Co. v. Granger 536Continental Time Corp. v. Swiss Credit Bank 539Hague Choice of Court Agreements Convention 541

xx Contents

ALI’s Proposed Federal Foreign Judgments Recognition andEnforcement Act §11 541

Notes on Ingersoll, Continental Time, and Legislative Materials 541C. Antisuit Injunctions 551

1. Standards Governing Foreign Antisuit Injunctions in U.S. Courts 552a. Decisions Applying Stringent Limits on Issuance of Foreign Antisuit

Injunctions 552b. Decisions Applying More Flexible Standards to Issuance of

Foreign Antisuit Injunctions 5532. Selected Materials on Foreign Antisuit Injunctions in U.S. Courts 554

China Trade & Development Corp. v. MV Choong Yong 554Kaepa, Inc. v. Achilles Corp. 557Notes on China Trade and Kaepa 560

PART THREELEGISLATIVE JURISDICTION AND CHOICE OF LAW

7

Legislative Jurisdiction 575

A. International Law Limits on Legislative Jurisdiction 5751. Introduction and Historical Background 5752. Contemporary International Law Limits on Legislative Jurisdiction:

The ‘‘Effects Test’’ and Erosion of Territorial Limits 5793. Selected Materials Concerning the Evolution of International

Law Limits on Legislative Jurisdiction 582J. Story, Commentaries on the Conflict of Laws 582Restatement (First) Conflict of Laws (1934) 582Restatement (Second) Foreign Relations Law of the United States (1965) 582Restatement (Second) Conflict of Laws (1971) 582Restatement (Third) Foreign Relations Law of the United States (1987) 582Notes on Story’s Commentaries and Restatements 582

B. International Law Limits on Legislative Jurisdiction in U.S. Courts 5881. U.S. Federal Law Prevails over Inconsistent Jurisdictional Limits

of Customary International Law in U.S. Courts 5882. Presumptions That Congress Has Not Violated International

Law and Has Not Extended U.S. Law Extraterritorially 5883. Relationship Between U.S. State Law and Jurisdictional Limits

of Customary International Law 589C. Constitutional Limitations on Legislative Jurisdiction in U.S. Courts 589

1. Constitutional Limits on Federal Legislative Jurisdiction 590United States v. Davis 591Notes on United States v. Davis 593

2. Constitutional Limits on State Legislative Jurisdiction 597a. Historic Constitutional Limits 597

Home Insurance Co. v. Dick 598Notes on Dick 600

Contents xxi

b. Contemporary Constitutional Limits on State Legislative Jurisdiction 603(i) Due Process Limitations on State Choice of Law 603Allstate Insurance Co. v. Hague 604Notes on Allstate 611(ii) Foreign Commerce and Other Constitutional Limitations

on State Legislative Jurisdiction 614American Insurance Association v. Garamendi 617Notes on Garamendi 621

8

Choice of Law in International Litigation 629

A. Application of Federal Statutes in International Cases 6291. Determining the Territorial Reach of Federal Legislation in

International Cases: The Problem of Silent or Ambiguous Statutes 6292. Historical Introduction: The Territoriality Presumption 630

American Banana Co. v. United Fruit Co. 635Lauritzen v. Larsen 638Equal Employment Opportunity Commission v. Arabian American Oil Co. 643Notes on American Banana, Lauritzen, and Aramco 648

3. Contemporary Approach to Extraterritorial Application ofFederal Antitrust Statutes 657

a. Overview of U.S. Antitrust Laws 657b. From American Banana’s Territoriality Presumption to Alcoa’s

Effects/Intent Test 658United States v. Aluminum Company of America (‘‘ALCOA’’) 659Industrial Investment Development Corp. v. Mitsui & Co. 660Notes on Alcoa and Mitsui 662

c. Protests Against the Extraterritorial Application of theU.S. Antitrust Laws 665

d. Moderating the Extraterritorial Application of theU.S. Antitrust Laws: Timberlane and Third Restatement §403 667

Restatement (Second) Foreign Relations Law (1965) §40 668Timberlane Lumber Co. v. Bank of America N.T. & SA 668Restatement (Third) Foreign Relations Law of the United States (1987)

§§402 & 403 670Notes on Second Restatement, Timberlane, and Third Restatement 670

e. Contemporary Supreme Court Approach to ExtraterritorialApplication of U.S. Antitrust Laws: Hartford Fire andHoffmann-LaRoche 675

Hartford Fire Insurance Co. v. California 676F. Hoffmann-LaRoche, Ltd. v. Empagran, SA 682Notes on Hartford Fire and Hoffmann-LaRoche 686

4. The Extraterritorial Application of Federal Securities Laws 694Morrison v. National Australia Bank Ltd. 696Notes on Morrison 702

xxii Contents

B. Choice of Law Applicable to Torts 7071. Traditional Approach: Territoriality and Vested Rights 708

a. The Territorial Rule: ‘‘Place of the Wrong’’ 708b. Selected Materials on the Traditional ‘‘Place of Wrong’’ Rule 709

J. Story, Commentaries on the Conflict of Laws §§18, 20, 23, 29,32, 33, 35 & 38 (2d ed. 1841) 709

Restatement (First) Conflict of Laws §§1, 6, 377 & 378 (1934) 709Alabama Great Southern Railroad Co. v. Carroll 709Notes on Story’s Commentaries, First Restatement, and Carroll 711

c. Characterization, Escape Devices, and Procedural Laws 715Victor v. Sperry 716Restatement (First) Conflict of Laws (1934) §§384, 585, 610, 611 & 612 718Notes on Victor and First Restatement 718

2. Contemporary Approaches to Choice of Law Applicable to Torts 722a. Criticism of Vested Rights Doctrine 722b. Contemporary Approaches: Interest Analysis 723c. Contemporary Approaches: Second Restatement’s ‘‘Most

Significant Relationship’’ Standard 724d. Contemporary Lower Court Approaches to Choice of Law

Applicable to Tort 725Currie, Notes on Methods and Objectives in the Conflict of Laws 726Restatement (Second) Conflict of Laws (1971) §§6, 10, 122, 145,

146 & 156 728Tramontana v. SA Empresa de Viacao Aerea Rio Grandense 728Notes on Currie, Second Restatement (Second), and Tramontana 733

C. Choice of Law Applicable to Contracts 7421. Party Autonomy and Choice-of-Law Clauses 742

a. Traditional U.S. Approach: Choice-of-Law Clauses Not Enforceable 742b. Contemporary Approach: Choice-of-Law Clauses Are Presumptively

Enforceable 743c. Public Policy 744d. Reasonable Relationship 745e. Interpretation of Choice-of-Law Clauses 746f. Selected Materials on Party Autonomy 747

Restatement (Second) Conflict of Laws (1971) §§187 & 204 747The Bremen v. Zapata Off-Shore Company 747Richards v. Lloyd’s of London 747N.Y. General Obligations Law §5-1401 747Lehman Brothers Commercial Corp. v. Minmetals International

Non-Ferrous Metals Trading Co. 747Notes on Second Restatement, Bremen, Richards, and Minmetals 751

2. Traditional Approach to Choice of Law Governing Contracts inthe Absence of Choice-of-Law Agreement: Territoriality andVested Rights 760Restatement (First) Conflict of Laws (1934) §§332 & 358 761Milliken v. Pratt 761Louis-Dreyfus v. Paterson Steamships, Ltd. 763Notes on First Restatement, Milliken, and Louis-Dreyfus 765

Contents xxiii

3. Contemporary Approach to Choice of Law Governing Contractsin the Absence of Choice-of-Law Agreement: ‘‘Most SignificantRelationship’’ 767Restatement (Second) Conflict of Laws (1971) §§188, 198, 202 & 206 768Lilienthal v. Kaufman 768Notes on Second Restatement and Lilienthal 772

D. Erie and the Choice-of-Law Rules in Federal Courts 775Day & Zimmermann, Inc. v. Challoner 775Liu v. Republic of China 776Notes on Day & Zimmermann and Liu 776

E. Proof of Foreign Law 779First National City Bank v. Compania de Aguaceros, SA 780Bodum USA, Inc. v. La Cafetiere, Inc. 782Notes on Aguaceros and Bodum 786

9

Act of State and Foreign Sovereign Compulsion 793

A. Act of State Doctrine: Introduction and Historical Background 793B. Contemporary Formulations of the Act of State Doctrine 797

1. The Sabbatino Decision 797Banco Nacional de Cuba v. Sabbatino 798Notes on Sabbatino 804

2. Elements of the Act of State Doctrine 813a. Definition of ‘‘Act of State’’ 813

Alfred Dunhill of London, Inc. v. Republic of Cuba 814Notes on Dunhill 815

b. ‘‘Sitting in Judgment’’ on an Act of State: Validity vs. Motivations 819W.S. Kirkpatrick & Co. v. Environmental Tectonics Corp. 820Notes on Environmental Tectonics 824

c. The Situs Requirement 828Braka v. Bancomer, S.N.C. 829Notes on Bancomer 830

C. Exceptions to the Act of State Doctrine 8341. The Bernstein Exception 834

W.S. Kirkpatrick & Co. v. Environmental Tectonics Corp. 836Notes on Environmental Tectonics 836

2. The ‘‘Commercial’’ Exception 838Alfred Dunhill of London, Inc. v. Republic of Cuba 839Notes on Dunhill 841

3. The ‘‘Treaty’’ Exception 844Kalamazoo Spice Extraction Co. v. Provisional Military Government

of Socialist Ethiopia 844Kuwait Airways Corp. v. Iraqi Airways Co. 847Notes on Kalamazoo Spice and Kuwait Airways 849

4. The Second Hickenlooper Amendment 852D. Foreign Sovereign Compulsion Doctrine 853

Interamerican Refining Corp. v. Texaco Maracaibo, Inc. 853Restatement (Third) Foreign Relations Law §441 (1987) 855Restatement (Second) Conflict of Laws §202 (1971) 855Notes on Texaco Maracaibo and Restatements 855

xxiv Contents

PART FOURINTERNATIONAL JUDICIAL ASSISTANCE

10

Service of U.S. Process on Foreign Persons 863

A. Introduction and Historical Background 8631. Choice of Law 8642. Service of Process in the United States: An Historical Overview 864

B. Contemporary U.S. Rules Governing Service of Process on ForeignDefendants 867

1. Service of Process in Federal Court Proceedings 867a. Service of Complaint and Summons Under Rule 4 of the Federal

Rules of Civil Procedure 867b. Service of Summons and Complaint as a Jurisdictional

Requirement Under the Federal Rules of Civil Procedure 867c. Service of Complaint and Summons as a Means of Notice

Under the Federal Rules of Civil Procedure 868d. Service as Commencing an Action and Tolling Statutes of

Limitations Under the Federal Rules of Civil Procedure 8682. Mechanisms for Serving Foreign Defendants with U.S. Process

Within the United States 8693. No Service of U.S. Process Abroad by U.S. Consuls 8704. Service of U.S. Process Abroad Under Old Rule 4(i) of the Federal

Rules of Civil Procedure 8705. Service of U.S. Process Abroad on Foreign Defendants Under

Rule 4(f) of the Current Federal Rules of Civil Procedure 871a. Rule 4(f)(1): Service Abroad Pursuant to Hague Service

Convention and Other ‘‘Internationally Agreed Means’’ 871b. Rule 4(f)(2): Alternative Mechanisms of Service Abroad 873c. Rule 4(f)(3): Service as Directed by District Court 873

6. Waivers of Service Under Rule 4(d) 8747. Service of Process on Foreign Defendants in State Court Proceedings 8758. Due Process Clause: Reasonable Notice Requirements for Service 876

C. Service of Process in Foreign Legal Systems 8761. Rules Governing Service of Process in Foreign Courts 8762. Restrictions on Service of Foreign Process Within National Territory 8773. Selected Materials on Foreign Service Restrictions and Letters

Rogatory 878Swiss Penal Code Article 271 879Diplomatic Note of January 10, 1980 from the Embassy of France to

the U.S. Department of State 879Diplomatic Note Dated September 27, 1979 from the Embassy of the

Federal Republic of Germany to the U.S. Department of State 879United States Code 28 U.S.C. §§1696 &1781 880U.S. Department of State, Circular on Preparation of Letters Rogatory 880Notes on Article 271, Diplomatic Notes, and Letters Rogatory 880

Contents xxv

D. A Closer Look at Service of U.S. Process Abroad: Selected Issues 8841. Service of U.S. Process Abroad Under New Rule 4(f) and Other

Legislative Grants Where Foreign Law Restricts U.S. Service 884a. Congress May Authorize Service Abroad in Violation of

International Law 884b. Presumption That Congress Does Not Intend to Authorize

Service Abroad in Violation of International Law 884c. Rule 4(f)’s Provisions for Service Abroad in Violation of

Foreign Law 885Commodity Futures Trading Commission v. Nahas 885Federal Rules of Civil Procedure, Rule 4(f) 889Rio Properties, Inc. v. Rio International Interlink 889Notes on Nahas, Rule 4(f), and Rio 983

2. Service of Process Abroad Pursuant to the Hague ServiceConvention 905

a. The Hague Service Convention Is Not a Basis for PersonalJurisdiction 906

b. Historical Background of the Hague Service Convention 9063. Overview of the Hague Service Convention 9084. Purposes of the Hague Service Convention 9095. Scope of Hague Service Convention: ‘‘Civil or Commercial’’ 9106. Service of Process by Central Authorities Under Article 5 of the

Hague Service Convention 910a. Service Under Article 5(a) in the Manner Used for Service in

Domestic Actions 911b. Service by Central Authority Pursuant to Article 5(b) 912c. Service by the Central Authority Pursuant to Article 5’s

‘‘Second Paragraph’’ 9137. ‘‘Exclusivity’’ of the Hague Service Convention 913

a. The Hague Service Convention Preempts Service MechanismsUnder Local Law 913

b. The Hague Service Convention Provides Service MechanismsSupplementing Domestic Law 914

Kadota v. Hosogai 914Notes on Kadota 916

8. Alternative Mechanisms for Service Under Articles 8, 10, and 19of the Hague Service Convention 920

a. Direct Service by Consular and Diplomatic Channels UnderArticle 8 920

b. Indirect Service by Consular and Diplomatic Channels UnderArticle 9 921

c. Alternative Service Mechanisms Under Article 10 921(1) Article 10(a): ‘‘Sending’’ Judicial Documents by Mail 921(2) Articles 10(b) and 10(c): Service by ‘‘Competent Persons’’ 922

d. Article 19’s Savings Provision 922Water Splash Inc. v. Menon 923Vasquez v. Sund Emba AB 926Notes on Water Splash and Vasquez 928

xxvi Contents

9. Scope of the Hague Service Convention: When Is‘‘Service Abroad’’ Required and When Can Service BeEffected Within the United States on Foreign Defendants? 933Volkswagenwerk AG v. Schlunk 934Notes on Volkswagenwerk v. Schlunk 940

10. Default Judgments Under Article 15 of the Hague ServiceConvention 946

E. Service of Process Abroad Pursuant to the Inter-AmericanConvention on Letters Rogatory 946

F. Service of U.S. Process on Foreign States 9471. FSIA’s Regime for Service on Foreign States 9472. Alternative Mechanisms for Service Prescribed for

‘‘Foreign States Proper’’ and for Foreign State‘‘Agencies and Instrumentalities’’ 948

3. Selected Materials on Service Under the Foreign SovereignImmunities Act 948Foreign Sovereign Immunities Act 949Magness v. Russian Federation 949Notes on FSIA and Magness 952

G. Service of Foreign Process in the United States 9551. No Direct U.S. Legal Restrictions on Service of Foreign

Process in the United States 9552. Absence of Direct U.S. Legal Restrictions on Foreign Service

of Process Mechanisms Does Not Imply That U.S. Courts WillRecognize Resulting Foreign Judgments 956

3. U.S. Judicial Assistance in Serving Foreign Process in the United States 956a. Section 1696 956b. Section 1781 957

4. Ensuring That Foreign Process Is Served in a Manner ThatWill Permit U.S. Recognition of a Foreign Judgment 958

11

Extraterritorial Discovery and Taking Evidence Abroad 959

A. Overview of U.S. Discovery of Materials Located Abroad 959B. Foreign Reactions to Unilateral Extraterritorial U.S. Discovery 963

1. Foreign ‘‘Discovery’’ Systems 9632. Foreign Diplomatic Objections to U.S. Discovery 9653. Foreign Blocking Statutes 9664. Selected Materials on Foreign Diplomatic Notes and Blocking Statutes 967

Diplomatic Note from the Secretary of State for External Affairsof Canada to the Ambassador of the United States 968

French Penal Code Law No. 80-538 969Swiss Penal Code Article 273 969Philippine Presidential Decree No. 1718 969Notes on Objections to U.S. Discovery and Blocking Statutes 969

C. Direct U.S. Discovery of Materials Located Abroad: Judicial Power 9711. Direct Extraterritorial Discovery of Documents from Parties to

U.S. Litigation 971

Contents xxvii

2. Direct Extraterritorial Discovery from Parties by Deposition upon OralExamination 972

a. Standards for Ordering Deposition of Foreign Persons 972b. An Introduction to the Mechanics of Conducting Foreign

Depositions 9753. Selected Materials on Direct Extraterritorial Discovery from Parties 975

In re Uranium Antitrust Litigation 976Dubai Islamic Bank v. Citibank, NA 977Notes on Uranium Antitrust and Dubai Islamic Bank 981

4. Direct Extraterritorial Discovery from Nonparty Witnesses 986Federal Rules of Civil Procedure, Rule 45 98728 U.S.C. §§1783 & 1784 987Laker Airways Limited v. Pan American World Airways 987Notes on Rule 45, Pan American World Airways, and

§§1783 and 1784 989D. Direct U.S. Discovery of Materials Located Abroad: Resolving

Conflicts Between U.S. Discovery Orders and Foreign Law 9941. Extraterritorial Discovery in Violation of Foreign Law:

Historical Introduction and Judicial Power 994a. Historical Introduction 994b. Societe Internationale v. Rogers 995

Restatement (First) Conflict of Laws §94 (1934) 996Restatement (Second) Foreign Relations Law §§39 & 40 (1965) 996United States v. First National City Bank 996Notes on Restatements and City Bank 999

2. Extraterritorial Discovery in Violation of Foreign Law: ContemporaryApproaches 1005Foreign Relations Law of the United States Restatement

(Third) §442 (1987) 1005Reinsurance Co. of America, Inc. v. Administratia Asigurarilor de Stat 1005In re Air Cargo Shipping Services Antitrust Litigation 1010Notes on Restatement §442, Reinsurance Company, and Air Cargo 1012

E. Discovery Pursuant to Customary International Judicial Assistance 1017F. Discovery Abroad Under the Hague Evidence Convention 1019

1. Overview of the Hague Evidence Convention 1019a. Scope of the Convention 1020b. Central Authority Mechanism 1021c. Article 23’s Exception for Pretrial Document Requests 1022d. Alternative Methods of Taking Evidence Pursuant to the

Hague Evidence Convention 1023e. Execution of Letters of Request 1024

2. ‘‘Exclusivity’’ of the Hague Evidence Convention: Aerospatiale 1025Societe Nationale Industrielle Aerospatiale v. U.S. District Court 1026Notes on Aerospatiale 1033

3. ‘‘Exclusivity’’ of the Hague Evidence Convention: Post-AerospatialeExperience 1037Article 23 Reservations of France, Germany, and Sweden 1037Benton Graphics v. Uddeholm Corp. 1037In re Vitamins Antitrust Litigation 1040U.S. Department of State, Circular on Preparation of Letters Rogatory 1044

xxviii Contents

Notes on Article 23 Reservations, Uddeholm, In re Vitamins,and Department of State Circular 1044

G. Taking of Evidence in the United States in Aid of Foreign Proceedings 10511. Taking of Evidence in the United States Without Court Assistance 10512. Taking of Evidence in the United States with Court Assistance 1051

Intel Corporation v. Advanced Micro Devices, Inc. 1052Notes on Intel 1058

12

Recognition and Enforcement of Foreign Judgments 1067

A. Introduction 10671. Recognition and Enforcement Distinguished 10682. Recognition and Enforcement of Sister State Judgments Under

the U.S. Full Faith and Credit Clause 1068B. Recognition and Enforcement of Foreign Judgments by U.S. Courts 1069

1. No Express Federal Law Governing Recognition and Enforcementof Foreign Judgments 1069

2. Contemporary Approaches to Recognition of ForeignJudgments in the United States 1071

a. Hilton v. Guyot: International Comity and the PresumptiveRecognition of Foreign Judgments 1071

b. Statutory Mechanisms for the Recognition of ForeignJudgments: Uniform Foreign Money Judgments RecognitionAct and Uniform Foreign-Country Money JudgmentsRecognition Act 1072

3. Foreign Approaches to the Recognition of U.S. and OtherJudgments 1074

4. Abortive Hague Jurisdiction and Judgments Convention andALI’s Proposed Judgments Legislation 1075

5. Selected Materials on the Presumptive Recognition ofForeign Judgments 1076Hilton v. Guyot 1076Restatement (Second) Conflict of Laws §§92 & 98 (1971) 1080Uniform Foreign Money Judgments Recognition Act 1080European Union Council Regulation (EC) No. 1215/2012 1080American Law Institute Proposed Foreign Judgments Legislation 1080Notes on Hilton, Second Restatement, and Legislative Materials 1080

6. The Reciprocity Requirement 1084Hilton v. Guyot 1085Somportex, Ltd. v. Philadelphia Chewing Gum Corp. 1085Reading & Bates Constr. Co. v. Baker Energy Resources Corp. 1086Notes on Hilton, Somportex, and Baker Energy 1088

7. The Revenue Rule 1092Her Majesty the Queen in Right of the Province of British Columbia v.

Gilbertson 1093Notes on Her Majesty 1094

8. Applicable Law and the Erie Doctrine 1100Somportex, Ltd. v. Philadelphia Chewing Gum Corp. 1101

Contents xxix

Her Majesty the Queen in Right of the Province of BritishColumbia v. Gilbertson 1101

Notes on Somportex and Her Majesty 1101C. Exceptions to the Presumptive Recognition of Foreign Judgments

in U.S. Courts 11051. Adequate Notice and Proper Service 1105

Ackermann v. Levine 1106Notes on Ackermann 1107

2. Personal and Subject Matter Jurisdiction of Rendering Court 1111Mercandino v. Devoe & Raynolds, Inc. 1112S.C. Chimexim SA v. Velco Enterprises Ltd. 1112Notes on Mercandino and S.C. Chimexim 1114

3. Public Policy 1123Ackermann v. Levine 1124Telnikoff v. Matusevitch 1127Southwest Livestock & Trucking Co., Inc. v. Ramon 1129Notes on Ackermann, Telnikoff, and Southwest Livestock 1131

4. Fairness of Foreign Judicial System 1137Society of Lloyd’s v. Ashenden 1137Bridgeway Corp. v. Citibank 1139Notes on Ashenden and Bridgeway 1142

13

International Commercial Arbitration and U.S. Courts: An Overview 1149

A. Overview of International Arbitration 11491. Introduction 11492. Overview of International Legal Framework for Arbitration 1152

a. The New York Convention 1153b. National Legislation Concerning International Commercial

Arbitration 1153c. U.S. Legislation Concerning International Commercial

Arbitration 1154B. Enforceability of International Arbitration Agreements Under

the New York Convention and the FAA 11561. Introduction to Enforceability of International Arbitration Agreements 1156

a. Historical Background 1156b. Overview of Enforceability of International Arbitration

Agreements Under the FAA 1157c. Separability of the Arbitration Agreement 1159d. Validity and Enforceability of International Arbitration

Agreements in U.S. Courts Under the New York Convention 1159e. Who Decides Challenges to Arbitral Jurisdiction:

Competence-Competence and First Options v. Kaplan 11612. Selected Materials on Enforcement of International

Arbitration Agreements in U.S. Courts 1162Federal Arbitration Act, 9 U.S.C. §§1-16, 201-210, §§301-307 1163UNCITRAL Model Law 1163

xxx Contents

Rhone Mediterranee Compagnia Francese di Assicurazionie Riassicurazioni v. Achille Lauro 1163

Republic of Nicaragua v. Standard Fruit Co. 1165Nokia Maillefer SA v. Mazzer 1168Notes on Statutory Materials, Rhone, Standard Fruit, and Nokia 1169

3. The Non-Arbitrability Doctrine in U.S. Courts 1177Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. 1178Richards v. Lloyd’s of London 1183Notes on Mitsubishi and Richards 1183

4. Interpretation of International Commercial Arbitration Agreements 1186Apollo Computer, Inc. v. Berg 1187Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. 1189Notes on Apollo and Mitsubishi 1191

C. Recognition and Enforcement of International Arbitral Awards 11931. Enforceability of International Arbitral Awards Under the New York

Convention 11942. Selected Materials on the Enforceability of International

Arbitral Awards 1195Federal Arbitration Act, 9 U.S.C. §§1-16, 201-210, §§301-307 1195UNCITRAL Model Law 1195Parsons & Whittemore Overseas Co. v. Societe Generale de

l’Industrie du Papier 1195Northrop Corp. v. Triad International Marketing SA 1198Notes on Statutory Materials, Parsons & Whittemore, and Triad 1199

D. Professional Responsibility in International Arbitration 12071. Introduction 12072. Selected Materials on Professional Responsibility 1208

Mich. Comp. Laws §600.916 (1961) 1208Williamson v. John D. Quinn Construction Co. 1209Lawler, Matusky & Skeller v. Attorney General of Barbados 1209Bidermann Indus. Licencing, Inc. v. Avmar NV 1210Swiss Penal Code, Articles 271 and 307 1211French Penal Code Law No. 80-538 1211ABA Model Rules on Professional Conduct, Rules 5.5(c)

& 8.5(b) and Comments 1211IBA Guidelines on Professional Responsibility in International

Arbitration, Guidelines 4 & 5 1212Notes on Williamson, Lawler, Bidermann, and Legislative Materials 1212

Index 000

Contents xxxi