Friday, February 16, 2018

Case of the Day: Xu v. Bd. of Regents of the Univ. of Wis. Sys., 2018 U.S. Dist. LEXIS 10406 (W.D. Wis. Jan. 22, 2018)

Summary:

Plaintiff is a Chinese American librarian of the University of Wisconsin-Madison. Plaintiff disputed with her supervisor as to how to categorize a Chinese language newspaper published in Taiwan of the 1940s, when Taiwan was a Japanese colony. Although the newspaper was originally categorized under "China," the supervisor re-categorized the paper under a new category of "Taiwan" following a suggestion from a student. Plaintiff and the supervisor engaged in a heated argument about the decision, and the plaintiff received a negative performance review as a result. The plaintiff also collapsed due to high blood pressure during this episode. Subsequently, the plaintiff filed a claim under Title VII of the Civil Rights Act for hostile work environment.

The court granted summary judgment for the defendant. The court found that defendant university's decision to create a new "Taiwan" category was not an adverse employment action, and nor were a negative performance review and some internal consideration about terminating the plaintiff's employment.

Takeaway:

The plaintiff here was a pro se, which makes sense: no employment attorney worth her salt would take this case, especially when the damages are de minimis. It is hard enough to win an employment discrimination case when the employee is actually fired. At any rate, this is another example of Asian historical dispute washing ashore of the U.S. courts.

Wednesday, February 14, 2018

Ongoing Case Highlight: In re Cathode Ray Tube (CRT) Antitrust Litig., 2018 U.S. Dist. LEXIS 16926 (N.D. Cal. Feb. 1, 2018)

Summary:

In an multi-district litigation involving numerous manufacturers of cathode ray tubes (CRT) monitors, there was a default judgment against Irico, a state-owned enterprise of China. Irico initially refused to appear, only filing a declaration that it is not subject to suit in the United States based on sovereign immunity. After the entry of default, Irico retained counsel and moved to set aside the default.

The court first determined whether it had jurisdiction over Irico, and found the "commercial activity" exception of the sovereign immunity applied to Irico. The court then granted the motion to set aside the default, as the prejudice to the plaintiff is somewhat self-inflicted (because the plaintiffs were slow to move for a default judgment) and Irico may yet present meritorious defenses, i.e. the renewed claim under sovereign immunity defense.

Takeaway:

This is fun, although I'm sure the plaintiffs' counsel would disagree. Sovereign immunity by state-owned enterprises is a particular problem with China, which is now an indispensable country in global manufacturing. Bears watching what ends up happening to Irico in this case.

Tuesday, February 6, 2018

Case of the Day: Synopsys, Inc. v. Ubiquiti Networks, Inc., 2018 U.S. Dist. LEXIS 14147 (N.D. Cal. Jan. 29, 2018)

Summary:

Plaintiff alleges the defendant pirated its software and stored the software in servers based in Taiwan. Then the defendant allegedly had its employees access the software remotely, for which the plaintiff sued for the Digital Millennium Copyright Act (DMCA) and fraud. In the course of the litigation, Plaintiff sought to conduct discovery over the Taiwanese servers, and the defendant objected.

The court granted the motion to compel. The court found the information stored in the servers in Taiwan is relevant. The court also rejected the defendant's claim that the DMCA did not apply to violations occurring wholly outside of the country, noting that this is a discovery motion and there are plausible scenarios under which the information stored in Taiwanese servers may be relevant--because, for example, the court may yet hold that the act of piracy happened in the United States rather than Taiwan. The court also found the Ninth Circuit's "Server Test" from Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007) to be inapposite, as the Server Test does not cover the situation in which the violative act was initiated in the United States.

Takeaway:

Thrillsville! This is about as exciting as a case can get if you care about territoriality principles. Here is the perfect manifestation of the contradictions in Equity Extraterritoriality. On one hand, the question is: if territoriality principles are to be observed, on what basis could the United States court exercise jurisdiction over servers located in Taiwan? On the flip side: if the Server Rule is an attempt to apply the territoriality principles into digital information, why formulate a separate test based on "control," i.e. the location of the person initiating the action? The difference runs from the fact that the court is taking a different approach to a discovery motion rather than the merits, but such distinction cannot be considered meaningful when we are discussing the application of territoriality, a bedrock principle in international law.

Tuesday, January 30, 2018

Media Appearance: South Korea's Chilly Response to a Joint Olympic Team on the Atlantic

My latest contribution to the Atlantic is about North Korea's participation in the upcoming Winter Olympics:
Justified or not, the younger generation’s feelings about the joint team offer a window into its broader attitude toward North Korea. Unlike their parents, they have little reason to feel kinship with North Koreans: A South Korean in her 30s was born a full generation after the end of the Korean War and came of age in the mid-90s. By then, Seoul had already grown into a glittering metropolis, while hundreds of thousands of North Koreans were starving to death during the March of Struggles from 1994 to 1998.
Although South Korea’s public education system emphasizes that all Koreans belong to the same minjok (“people”), young South Koreans can hardly identify with North Koreans. Young South Koreans tend to be wealthy, global-minded and well-traveled; those to the north are destitute and steeped in the Kim regime’s propaganda. In a hypothetical, reunified Korea, the burden of taking care of the North Koreans would fall on the South Koreans, and especially on the younger generation.

Many North Korea analysts have argued that South Koreans were essentially nationalist dupes who were willing to give up strategic advantage because they were only too happy to see North Korea participate in the Pyeongchang Games. The New York Times made a similar point. Such analysis badly misreads the South Korean public mood--which happens quite often because many North Korea analysts do not speak the language and do not observe the Korean society closely.

Monday, January 29, 2018

Case of the Day: Moseley v. Suzuki Motor of Am., Inc., 2018 U.S. Dist. LEXIS 11609 (D. Idaho Jan. 24, 2018)

Summary:

Plaintiff is the estate of a decedent who died in an accident involving the motorcycle manufactured by defendant Suzuki, distributed through American Suzuki Motor Corporation (which is now defunct.) The motorcycle was originally purchased in Utah, then was resold to an owner in Idaho. The owner lent the decedent to ride the motorcycle, whose brakes allegedly failed and killed the rider. Defendant moved to dismiss.

The court granted the motion, finding there was no personal jurisdiction over the defendant, which is a Japanese corporation. That the defendant operated a subsidiary in Idaho was not sufficient to establish specific jurisdiction. The court also found it notable that the particular motorcycle in this case was purchased in Utah rather than Idaho.

Takeaway:

In this blog's unofficial 50-state survey of the long-arm personal jurisdiction, chalk Idaho into the "not so long" column. There are interesting factual points that may change the court's decision later--for example, what if the motorcycle was purchased in Idaho rather than Utah? But as of now, Idaho should be considered to be a state that follows Nicastro and disavowed the stream of commerce theory.

Friday, January 26, 2018

Academic Corner: Equity Extraterritoriality

Writing this 85-page article was a beast of a process, but I am very glad I did it. My latest academic article, Equity Extraterritoriality, is now published on Duke Journal of Comparative and International Law. The article is available on the journal's website.

Although the article covers a lot of ground, the basic idea is fairly simple: although territoriality is a fundamental feature in the U.S. law, there is almost no concern for territoriality when it comes to court orders. Instead, U.S. courts make extraterritorial orders all the time, as a matter of course, with no second thought given to the territoriality principle. I call this type of extraterritoriality "Equity Extraterritoriality," because such exercise of extraterritorial authority comes U.S. law's equity tradition. 

In contrast to the equity courts, the common law courts historical had a strict territorial limit. The limitation was so strict that, when an English common law court ruled on a dispute between two Englishmen concerning a contract made in Hamburg, the court would actually write: “we shall take it that Hamburg is in London in order to maintain the action which otherwise would be without our jurisdiction, and while in truth we know that Hamburg is beyond the sea, as judges we do not take notice that it is beyond the sea.” Ward's Case, 82 Eng. Rep. 244, 245 (1624–1628).

Equity Extraterritoriality basically works like this:  the court would assert personal jurisdiction over a party, then order the party to do something outside of the court's territorial jurisdiction. In today's interconnected economy, this practically allows the U.S. court any part of the world. For example, the New York court may order an international corporation headquartered in New York to take certain action in Shanghai, in which the corporation does business. (A common form of this type of argument is a document preservation order for international litigants appearing before the U.S. court, which essentially mandates U.S.-style document management worldwide.)

I observe that Equity Extraterritoriality creates the exact same problems associated with extraterritoriality application of any U.S. laws--which is why U.S. law applies the territoriality principle in other aspects of the law in the first place. What is more, the application of stricter territoriality principles on one side of a litigation (i.e. personal jurisdiction) causes litigants to: (1) challenge the outer limits of the personal jurisdiction theory (by engaging in even more aggressive theories of long-arm jurisdiction,) and; (2) lean even harder on the individuals with an extraterritorial reach, such as international banks and brokers.

In this blog, I have been chronicling the development of (1) quite a bit. We have situations in which U.S. District Courts and state courts are keeping alive the flames of long-arm personal jurisdiction despite the Supreme Court's suggestion to the contrary. (Example here, here, here, here and here.) As an academic matter, I think these cases are probably wrongly decided. But as a practitioner, these are all openings which an enterprising litigation counsel could use in the era of shrinking personal jurisdiction doctrine.

Tuesday, January 23, 2018

Case of the Day: IPOX Schuster, LLC v. Nikko Asset Mgmt. Co., 2018 U.S. Dist. LEXIS 9161 (N.D. Ill. Jan. 20, 2018)

Summary:

Plaintiff is a financial management firm that produces "indexes" of companies that recently made initial public offerings. Defendant, a Japanese investment trust, commissioned Lazard Asset Management and Lazard Japan Asset Management to create the "Nikko Fund," a financial product composed of the stocks of U.S. companies that recently went public. In creating the Nikko Fund, Lazard used the information collected by the plaintiff. The plaintiff sued under a number of theories, and the defendants moved for a summary judgment.

The court granted summary judgments on most of the claims. There was no common law misappropriation, because the plaintiff's information was not time-sensitive and Lazard was not free-riding off the plaintiff's information. There was no trademark violation to the extent that the Nikko Fund was marketed in Japan. There was no contract between the parties, either express or implied. The court, however, denied summary judgment on the claims of fraud and trademark violation based on the defendant's presentation of the "Nikko Fund" in New York.

Takeaway:

So this is fun. In the finance industry, everyone steals ideas from everyone else--and this case seems to say there can be some recourse, depending on the circumstances.