Milestones: Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437 (1952)

Summary:

Defendant Benguet Mining owned gold and silver mines in the Philippines, and temporarily relocated to Ohio while Imperial Japan occupied the Philippines. In Ohio, Benguet was sued. Through appeal, Ohio Supreme Court held that Benguet was a foreign corporation, but Ohio had general jurisdiction over Benguet because regularly conducting business in Ohio. The Supreme Court of the United States held the same:  

"if an authorized representative of a foreign corporation be physically present in the state of the forum and be there engaged in activities appropriate to accepting service or receiving notice on its behalf, we recognize that there is no unfairness in subjecting that corporation to the jurisdiction of the courts of that state through such service of process upon that representative."

Takeaway:

An important caveat: because of the recent Daimler AG v. Bauman, 571 U.S. ___ (2014), Benguet is almost certainly no longer good law, at least to the extent that it holds having an agent to receive service in a forum subject the corporation to the general jurisdiction of that forum. This case is better understood as one of the high-water marks of the "doing business" general jurisdiction, which is currently going through a low-water period. Daimler, however, does leave open the possibility that there is some remainder general jurisdiction for corporations that are essentially "at home" in a forum--the standard under which the defendant Benguet may have qualified.

Milestones: Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134 (2003)

Summary:

Two military suppliers competed to win the contract for military equipment from Republic of Korea. The losing company sued the winning company for lost business opportunity due to unfair practices of a competitor, namely providing bribes and sexual favors to key Korean officials.

The questions presented to California Supreme Court were: (1) whether disgorgement of profit is available even if the defendant won the profit from a third party, and; (2) whether tortious interference with prospective economic advantage requires pleading specific intent to interfere with plaintiff's business expectations.

The court found that disgorgement is not an available remedy under California's Unfair Competition Law, but also found that plaintiff only needs to plead that the defendant knew interference was substantially certain to occur in order to plead intentional interference.

Takeaway:

This is about as sexy as a legal case can get. Military equipment and sexual favors! But this is also a landmark case that defined the contours of two major laws governing business, and it is cited quite frequently.

Case of the Day: SEC v. China Infrastructure Inv. Corp. 2016 U.S. Dist. LEXIS 69399 (D.D.C. May 26, 2016)

Summary:

Securities and Exchange Commission filed suit against China Infrastructure Investment Corp. and several individual defendants on March 3, 2015, mostly for securities fraud. After filing an answer through counsel, the defendants claimed that they require hiring a new attorney, then became unresponsive. 

Finding that the defendants have violated every court order since September 17, 2015, the court entered a default judgment. The defendants are enjoined from violating any further securities regulation, and the individual defendants are enjoined from serving as officers or directors of publicly traded companies. The defendants were also assessed $2.1 million in civil penalties.

Takeaway:

Unfortunately, this is not an uncommon scenario--an Asian party simply ignores the U.S. court and essentially chooses to deal with the default judgment, because it deems the cost-benefit calculus to be in its favor. What is a bit surprising is that a party would engage in this tactic with the S.E.C., which essentially controls its ability to conduct business in the United States.

Case of the Day: Wagner v. Olympus Am., 2016 U.S. Dist. LEXIS 68450 (E.D. Pa. May 25, 2016)

Summary:

Plaintiffs claim that the defendant's medical device malfunctioned, causing death due to bacterial infection in a procedure performed in Charlotte, North Carolina. Plaintiff brought suit in the Eastern District of Pennsylvania, which is the principal place of business for the defendants. Defendants moved to transfer the case to Western District of North Carolina pursuant to 28 U.S.C. s. 1404(a). After weighing several factors, the court granted the motion.

Takeaway:

This case is a bit unusual--transfer of venue motion is fairly common, but in a tort case, corporate defendants rarely want to go back to the place where the injury occurred for fear that the local jury may be disposed against them. Would be curious to know the thought process behind this action.

Case of the Day: Stoyas v. Toshiba Corp., 2016 U.S. Dist. LEXIS 67581 (C.D. Cal. May 20, 2016)

Summary:

Plaintiffs are investors in defendant Toshiba who claim Toshiba's false accounting report caused loss. Plaintiffs alleged a claim both under U.S. law and Japanese law. The court found that plaintiffs failed to state a claim under Securities and Exchange Act of 1934, and dismissed the Japanese law claim based on comity and interest-balancing analysis.

Takeaway:

This is a fairly standard securities class action case, with one interesting twist--plaintiffs pleaded a cause of action under Japanese law, likely because they knew their Exchange Act claims were not strong. The tactic was enterprising, but I believe the court reached the correct result; the risk of having conflicting judgments with the Japanese courts (which were already handling a securities litigation with Toshiba involving the same fact pattern) was too great.

Case of the Day: Valtech Solutions v. Davenport, 2016 U.S. Dist. LEXIS 67139 (N.D. Tex. May 23, 2016)

Summary:

Plaintiff brought suit against a multinational corporation and a number of individuals, some of whom reside in India. Indian individual defendants moved to dismiss for lack of jurisdiction and/or forum non conveniens. Plaintiff cross-moved for jurisdictional discovery over the Indian individual defendants.

The court found that plaintiff made the "preliminary showing of jurisdiction" by making factual allegations of "reasonable particularity" that show the possible existence of the contacts between the defendants and the forum state.

Takeaway:

This type of limited jurisdictional discovery was once rare, but increasingly becoming commonplace when foreign defendant is implicated. This means that counsel representing the defendant should be ready in the early part of the case to respond to discovery.

Case of the Day: Leibovitch v. Islamic Republic of Iran, 2016 U.S. Dist. LEXIS 66358 (N.D. Ill. May 19, 2016)

Summary:

Plaintiff is the next-of-kin Israeli Americans who died from terrorist attacks in Israel in 2003, allegedly orchestrated by Iran. In connection with their litigation, plaintiff issued a subpoena to Bank of Tokyo, and the bank moved to quash the subpoena. The bank argued that it searched its records within its Chicago branch, but they need not conduct a global search.

The court found that it lacked jurisdiction over Bank of Tokyo, as there is no general jurisdiction over Bank of Tokyo and the bank did not have sufficient minimum contacts to establish specific jurisdiction.

Takeaway:

Asian parties do not always appear in U.S. courts as primary litigants; increasingly, they appear as third parties, as is the case here.

Until two years, this case would turn mostly on sovereign immunity and the question of whether the plaintiff may conduct discovery over asset information of a sovereign. But Republic of Argentina v. NML Capital Ltd., 573 U.S. ___ (2014) extinguished that query by holding that such discovery does not implicate sovereign immunity. 

In the circuit split that led to NML Capital, Seventh Circuit (which includes the Northern District of Illinois) was reluctant to conduct discovery over a sovereign--which likely informed the decision in this case to be somewhat stringent about finding jurisdiction over Bank of Tokyo in this case. The concern in NML Capital was that U.S. courts may end up serving as a "clearing house" for global discovery; Seventh Circuit would surely resist becoming one.

Case of the Day: Ashraf-Hassan v. Embassy of France, 2016 U.S. Dist. LEXIS 60165 (D.D.C. May 6, 2016).

Summary:

Plaintiff is a Pakistani-French who worked at the French Embassy in Washington D.C. During her employment, her superiors repeatedly made derogatory comments regarding Muslims (accusing her as terrorist and suggesting she should work at the Pakistani Embassy, among other things,) and briefly terminated her employment when she became pregnant.

After having found that it had jurisdiction over the French Embassy notwithstanding the Foreign Sovereign Immunities Act (in a separate and earlier opinion,) the court held a bench trial and found that plaintiff established a discrimination claim under Title VII of the Civil Rights Act.

Takeaway:

This is slightly out of this blog's scope, since the plaintiff is a French citizen albeit Pakistani-born. But how often do you see a case brought against a foreign sovereign that ends in a victory?

Milestones: FR 8 Singapore Pte. Ltd. v. Albacore Mar., Inc., 754 F.Supp.2d 628 (S.D.N.Y. 2010)

Summary:

Plaintiff is a Singaporean corporation. Defendant Albacore Maritime, Inc. ("Albacore") is a Marshall Islands corporation, which is in turn owned by Prime Marine Corp. ("Prime"), also a Marshall Islands corporation. Albacore contracted to purchase a ship from plaintiff, and reneged on the contract due to the financial crisis of 2008-09. The contract had a clause that it "shall be governed by and construed in accordance with English law and any dispute arising out of this Agreement shall be referred to arbitration in London". Plaintiff began arbitration against Albacore, and sought to compel Prime into arbitration based on the allegation of veil-piercing between Prime and Albacore.

The court first found that it had subject matter jurisdiction under Section 4 of the Federal Arbitration Act, notwithstanding the fact that two foreign parties are involved. (Section 4 provides: "A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court which, save for such agreement, would have jurisdiction under Title 28 . . . , for an order directing that such arbitration proceed in the manner provided for in such agreement.") 

The court then had to make a choice-of-law determination to decide the law to apply on plaintiff's veil-piercing claim. After noting that "[w]here the choice of law in a Convention case is between the law specified by the choice-of-law clause and federal common law, Second Circuit precedent has been less than crystal clear[,]" the court found that the law specified in the forum selection clause (i.e. English law) controls. The court then ordered the parties to further brief on the veil-piercing implications under English law.

Takeaway:

This is about as complicated as an arbitration-related case can get. First significant point is the extraordinary jurisdiction under Section 4 of the FAA, which essentially opens up the U.S. court to any arbitration dispute anywhere in the world with any parties--an indicator of just how pro-arbitration U.S. law is. Another significant point is the choice-of-law jurisprudence, which is always a complicated puzzle when a choice-of-law clause is litigated in a forum that does not use the law designated by the clause.

Case of the Day: Phehlivanian v. China Gerui Advanced Materials Group, 2016 U.S. Dist. LEXIS 64427 (S.D.N.Y. May 16, 2006)

Summary:

Defendant is a steel processing company based in China and incorporated in British Virgin Islands. Plaintiffs purchased defendant's securities, and now claim that the defendant committed securities fraud. Specifically, plaintiffs claim that the defendant failed to disclose that it grossly overpaid for certain land use rights and that it paid $234 million to purchase an antique porcelain collection.

The court dismissed without prejudice, finding that the plaintiffs did not meet the heightened pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure and Private Securities Litigation Reform Act (PSLRA). The court found that the plaintiffs did not allege the facts that connects to material misstatement or omission, made with scienter.

Takeaway:

This is a fairly standard securities fraud case, with standard result--in most cases, the complaint is dismissed because the U.S. law has set up a fairly high bar for securities fraud allegation in the form of Rule 9(b) and PSLRA. But the fact pattern here is certainly not standard. The defendant is a BVI corporation doing business in China. (Good luck getting your U.S. judgment enforced!) One of the alleged frauds is not some run-of-the-mill accounting tweaks, but acquisition of ancient porcelain collection for more than $200 million. 

This, to me, seems to be an instance that shows U.S. securities regulation, which relies heavily on disclosure and private enforcement, is not sufficient to cover extraterritorial actors whose actual behaviors are difficult to ascertain.

Case of the Day: Wonderworks Pte. v. Hewlett Packard Co., 2016 Cal. App. Unpub. LEXIS 3566 (May 16, 2016)

Summary:

Plaintiff Wonderworks is a Singaporean corporation, wholly owned and managed by a California resident. There are three defendants: Hewlett-Packard Co. ("HPC"), a Delaware corporation principally doing business in Palo Alot, California; Hewlett-Packard Enterprise Services, LLC ("HPES"), whose principal place of business is in Texas, and; Hewlett-Packard Malaysia ("HPM"), incorporated and doing business in Malaysia.

HPM obtained a contract with the central bank of Malaysia, and asked Wonderworks to join in the bid. Wonderworks allegedly expended more than $8 million to compose the computer programs required by its part of the bargain with HPM. Eventually, according to plaintiff, "due to its own incompetence and intentional misconduct[,]" the final product could not be delivered to the central bank of Malaysia. Thereafter, HPM refused to pay Wonderworks.

Defendants filed a forum non conveniens motion, petitioning the court to dismiss the case in favor of litigating in Malaysia. The trial court judge partially granted the motion, staying the case (rather than dismissing) until the case was adjudicated in Malaysia. Plaintiff appealed. On appeal, the court reversed, finding that many significant ties existed between the case and the plaintiff's chosen forum of California.

Takeaway:

This is a relatively unusual result, because judges are often eager to dismiss a case and clear their docket through forum non conveniens motion whenever possible.

It is worth reading through the actual opinion and observe how deep into the weed the court wades in order to make the determination of whether the forum is convenient for the parties. In transnational litigation such as this one, forum non conveniens motion is a catch-all, mini-trial in the early stages where all evidence at parties' disposal is marshaled to cause or prevent the case from leaving the United States. Counsel should be prepared to litigate this point in the early stages.

Case of the Day: In re Estate of Byung-Tae Oh, 2016 N.J. Super. LEXIS 71 (N.J. App. Div. May 13, 2016)

Summary:

This is a lawsuit between two children of a decedent, who is a Korean national. Prior to death, the decedent transferred $900,000 to a New Jersey corporation, controlled by the younger son of the decedent. The older son sued, claiming that they were entitled to equal share of the inheritance under Korean probate law, and the $900,000 remained as decedent's property to be submitted to probate. The younger son argued that the transfer was a gift.

The court found that the transfer was an investment, not a gift. The court first noted that there is a chicken-and-egg jurisdictional issue, in that the underlying dispute directly affects the question of jurisdiction. (That is, if the transfer was a gift, New Jersey courts would not have jurisdiction to adjudicate this issue.) The court found that in such a case, the jurisdictional determination comes after the underlying dispute is resolved.

The defendant also argued that Korean law should apply rather than New Jersey law. The court rejected this argument, finding that the defendant did not show that applying Korean law would result in a different outcome. Finally, the court held that the transfer was an investment because the inter vivos transfer recipient had the burden to establish that the transfer was a gift, and the defendant had no documentation to meet the burden.

Takeaway:

I will admit--transnational family law disputes are my pet favorites. It has all the complexities of transnational litigation, and none of the coldness in the disputes between one giant multinational corporation versus another multinational corporation with their high-powered lawyers. 

The interesting part here is the possibility of a conflicts of law decision. More skilled counsel may have been able to exploit the angle, but here it appears that the argument was not fully developed.

Milestones: Asahi Metal Indus. Co. v. Superior Ct. of Cal., 480 U.S. 102 (1987)

Summary:

This cases arises out of a motorcycle accident that occurred in California. The rear tire of the motorcycle exploded, severely injuring the cyclist and killing his passenger. The cyclist sued the tire manufacturer, a Taiwanese company called Cheng Shin Rubber Industrial Co. Ltd. ("Cheng Shin"), in California state court. Cheng Shin in turn filed suit against Asahi Metal Industry Co. ("Asahi"), a Japanese manufacturer, which produced the tire valves for Cheng Shin's tires. 

The cyclist later settled with all defendants, which left standing only the lawsuit between Cheng Shin and Asahi. Asahi claimed that the state court in California had no jurisdiction over it. True, Cheng Shin sold throughout the world, and 20 percent of its sales took place in California. However, the transaction between Cheng Shin and Asahi occurred in Taiwan, and the assembly of Asahi's units into Cheng Shin's tires occurred in Taiwan.

The Supreme Court, in an opinion by Justice Sandra Day O'Connor, found that Asahi did not have the necessary minimum contacts with the state of California for the state to have jurisdiction over it. Having its products reach the United States indirectly through the stream of commerce, it was held, was not a sufficient basis for contacts with the forum.

Takeaway:

Asahi Metal is one of the most important Supreme Court cases regarding personal jurisdiction, and it is no surprise that Asian parties are involved. One could say that the Supreme Court stemmed the tide of numerous lawsuits filed against Asian manufacturers.

Case of the Day: Carrico v. Samsung Elec. Co., 2016 U.S. Dist. LEXIS 62454 (N.D. Cal. May 10, 2016)

Summary:

The case arises from an automobile accident that occurred in Half Moon Bay, California on May 11, 2014. The individual defendant Yoonhwa Park, an employee of Samsung Electronics, struck the two plaintiffs with a car rented from Hertz Corporation. The plaintiffs sued the individual, Samsung and Hertz. (Hertz were later dropped from the case, as were other affiliates of Samsung.)

The plaintiffs attempted to serve Park three times under the Hague Convention, and were unsuccessful because she had moved. Plaintiffs asked if Samsung would accept service on Park's behalf, but Samsung declined. (Correctly, the court notes, since Samsung has an obvious conflict with Park as to whether Park was acting within the scope of her employment.) Then the plaintiff moved to serve Park's U.S.-based attorney under Rule 4(f)(3) of the Federal Rules of Civil Procedure. The court granted the motion.

Takeaway:

The fact pattern is here is not unusual, but look at the time it took simply to serve the individual. Two years just to begin the litigation! In retrospect, it appears that the plaintiffs could have made the Rule 4(f) motion after the first Hague Convention attempt failed. What should have been a fairly routine personal injury case can become much more complicated when the defendant is not a U.S. resident. In such a case, attorneys who are experts in handling personal injury cases can be at a loss because they are not accustomed to dealing with the Hague Convention procedures.

Case of the Day: Kolanagireddy v. Bikki, 2016 Mich. App. LEXIS 923 (Mich. Ct. App. May 10, 2016)

Summary:

Husband and wife, who had businesses in both United States and India, were in the middle of the divorce proceeding. A restraining order was put in place to preserve the marital property. Husband sent an email to a bank in India to request a freeze on the wife's business account, and the bank complied although the husband was not listed as a holder for the account.

The district court found the husband in criminal contempt of the court, having violated the restraining order. The appellate court affirmed. Both the district court and the appellate court found that freezing assets is a type of "alienation" of property prohibited in the restraining order.

Takeaway:

Transnational matrimonial actions are always interesting, because they often highlight the issues that are not commonly seen in transnational commercial cases.

Legally, this case is not all that novel. It is well established that freezing a bank account is a type of alienation of property, and it is likewise well established that the courts may control extraterritorial actions of a party under its jurisdiction. But this case is notable for its fact pattern, which is rather typical of a transnational case. The defendant attempted to gain leverage in the U.S. court by taking informal actions to pressure the plaintiff, in violation of the U.S. court's provisional relief. 

This occurs, in part, because there is no international cooperation system as to provisional reliefs. (My forthcoming paper is regarding this topic.) In the absence of such a system, the best that a party could do is to ensure that she has legal representation in all countries in which she may find herself litigating. Certain an expensive proposition, but currently the only practical way a party could protect his interest.

Case of the Day: Sugartown Worldwide, LLC v. Shanks, 2016 U.S. Dist. LEXIS 60239 (E.D. Pa. May 6, 2016)

Summary:

Plaintiff holds a judgment against a Hong Kong corporation called Outlook International Ltd. ("Outlook"), which is a partnership between defendants Kenneth Shanks and James Michael Glover. After having failed to collect the judgment against the corporation, the plaintiff sued Shanks and Glover directly to satisfy the judgment. In January 2016, the court held a jury trial which found Glover liable. Glover filed a motion to vacate the judgment under Rule 60(b)(4) of the Federal Rules of Civil Procedure, claiming the court never had personal jurisdiction over him.

The court granted Glover's motion. It was not disputed that Glover never had meaningful contact with the forum, i.e. Pennsylvania, as he moved to Asia in 1989 and has resided there ever since. Glover's only connection with the forum is indirectly through Outlook, and Glover was not involved with the Outlook's transaction with the plaintiff that gave rise to the litigation.

Initially, the court found jurisdiction over Glover based on the theory that Glover may be an alter ego of Outlook, which (according to the court) purposefully directed its fraudulent activity toward Pennsylvania. But after the trial, the court found that there was not enough evidence to show Glover was Outlook's alter ego. The court also found that, based on the Supreme Court's decision of Walden v. Fiore, 134 S. Ct. 1115 (2014), Glover's contact with plaintiff alone could not serve as the basis for the minimum contacts analysis, even if the plaintiff is located in Pennsylvania. The requirement is that there be general contacts between the party and the forum, and the plaintiff failed to establish that Glover had such contacts with Pennsylvania.

Takeaway:

The defendant in this case pulled off one of the rarest feats in litigation--vacating an adverse judgment based on procedural grounds. Hats off to the lead attorney George C. Werner from Barley Snyder LLP.

This is one of the first cases applying Walden, a significant Supreme Court case regarding personal jurisdiction. It is well-established that, for a court to have jurisdiction over a party, the party must have "minimum contacts" with the forum. Walden clarified that the contact must be a more general kind, not simply the contact with the plaintiff who resides in the forum--which is exactly the kind of contact that Glover had with Pennsylvania in this case.

Personal jurisdiction is one of the most significant issues involving parties in Asia, as it is the threshold issue that determines whether they can even be sued in a U.S. court. A more rigorous minimum contacts analysis under Walden would likely lead to less number of Asian parties appearing before a U.S. court.

Case of the Day: Ooida Risk Retention Grp., Inc. v. Bhangal, 2016 U.S. Dist. LEXIS 60257 (D. Utah May 5, 2016)

Summary:

The case arises from a truck accident that occurred in 2012 near Beaver, Utah. The plaintiff is an insurance company, disputing that it has the duty to indemnify the damage caused by the defendants. One of the defendants apparently evaded service of process by moving to India. The plaintiff filed a motion to effectuate service by alternate means, in this case by publication in California (where the defendant apparently maintained an address prior to moving to India) and through email listed on the defendant's Facebook page.

The court granted the motion, observing that the plaintiff had hired more than one private investigator and made multiple efforts to serve. The court found that the plaintiff need not attempt to locate the defendant in India.

Takeaway:

Evasion of service is a constant thorn on the side of those who are attempting to serve a defendant who has the ability to escape the court's jurisdiction. If a defendant flees the country, the plaintiff need not attempt to locate the defendant overseas and serve through the Hague Convention. In most cases, as is here, the court would grant the motion to serve through alternative methods.

Milestones: In re Korean Air Lines Co., 642 F.3d 685 (9th Cir. 2011)

Summary:

(The case is also captioned as Bahn v. Korean Air Lines Co.)

Defendants are two Korea-based airlines, Korean Air Lines and Asiana Air Lines. Plaintiffs are individuals who purchased air line tickets. Plaintiffs claim, on behalf of those similarly situation, that the defendants engaged in price-fixing and assessed illegal surcharges in violation of federal and state antitrust laws.

The court first found that the California state law claims are pre-empted by federal law, pursuant to Airline Deregulation Act of 1978 ("ADA"). It was not entirely clear if ADA applied to the defendant air lines, as ADA had separate definitions for "air carrier" and "foreign air carrier"--opening the possibility that ADA did not pre-empt claims against foreign air carriers such as the defendants. The court, however, rejected this interpretation: "the context in which the term appears in the preemption provision indicates that Congress intended that it apply to all air carriers and not only to domestic carriers."

Takeaway:

Korean Air Lines has been one of the most frequently cited cases for antitrust cases, as it sets forth an important principle: that state law claims against air carriers are pre-empted.

Case of the Day: Teng v. District Director, USCIS, 2016 U.S. App. LEXIS 8161 (9th Cir. May 4, 2016)

Summary:

Petitioner Yu-Ling Teng is an immigrant from Taiwan. When Teng first entered the United States as a student in 1965, she provided her birth date to the Social Security Administration as August 9, 1939. When Teng applied for Permanent Residency in 1974, however, she provided documents that said her birthday was August 9, 1944. Because of the discrepancy, she has been unable to renew her driver's license since 2004.

Teng attempted to change her birth date through USCIS and SSA, both of which rejected her petition. After appealing to her state assemblywoman, Teng turned to the U.S. District Court, which also denied her petition for lack of subject matter jurisdiction.

The Ninth Circuit affirmed. While expressing significant amount of sympathy for the petitioner (using the expression "a bureaucratic mess of Gogolian proportions",) the court found that federal courts lack the subject matter jurisdiction to order USCIS to amend the agency-issued certificates of naturalization because the Immigration Act of 1990 stripped the courts the jurisdiction over naturalization proceedings.

Takeaway:

This is stuff for a Kafka novel! For 12 years petitioner has been unable to drive for the small fault of providing inconsistent birth dates to two different government agencies. She took her case all the way to the federal appellate court, only to find no relief.

It is yet another example of the type of bureaucratic mess to which immigrants are subjected. Personally, I would prefer the IRS to audit me twice before going through the process with the USCIS.

Milestones: Ohno v. Yasuma, 723 F.3d 984 (9th Cir. 2013)

(In the Milestones section, I will discuss significant previous cases that involved an Asian party in the U.S. courts.)

Summary:

Plaintiff sought recognition of a Japanese judgment in the U.S. Central District for California. The judgment was against a Japanese church and its leader that, according to plaintiff, took all of her property. The defendant opposed the recognition of judgment, claiming that such recognition would burden the free exercise of religion guaranteed under the Constitution of the United States and repugnant to the public policy of the United States for the same reason.

The court found that recognition of a foreign judgment is not a state action that triggers constitutional scrutiny, because recognition does not involve litigation on the merits and the petitioner seeking recognition is not a state actor. The court also found that the Japanese law applied to produce the judgment was not repugnant to public policy, as the Japanese law was a law of general application and the plaintiff could have instituted the same type of action in California as well.

Takeaway:

Recognition of foreign judgments is one of the most significant topics in private international law, as it directly implicates the cooperation among different legal systems. Although the arguments made in this case may seem outlandish in the first blush, it does raise significant and interesting legal questions. As the court noted, this was the first time in which recognition of a foreign money judgment was challenged on constitutional grounds.

The court correctly decided that recognition of judgment is not state action, which means constitutional scrutiny is not available. In addition to following the precedent, the opinion vindicates the central aim of having a system of judgment recognition--that the process would be a speedy, almost-always-administrative one rather than a re-litigation of the underlying judgment.

Case of the Day: Laydon v. Mizuho Bank, 2016 U.S. Dist. LEXIS 57753 (S.D.N.Y. Apr. 29, 2016)

Summary:

The defendants are a number of UK and Japanese banks, including Mizuho, Mitsubishi, Sumitomo Mitsui, Bank of Yokohoma, JPMorgan Chase, Barclays, HSBC, and so on. The plaintiffs allege that the defendants manipulate the Euro-Yen LIBOR rates. The defendants objected to the plaintiffs document request, claiming that the request violated UK's Data Protection Act and English Common Law duty of confidentiality for bankers.

The magistrate found that a UK court could plausibly find the defendants violated the DPA and duty of confidentiality. After the Aerospatiale comity analysis, the court overruled the defendants' objection.

Takeaway:

Geoffrey Sant reported that there is an alarming increase in U.S. court order to violate foreign laws, especially in the context of discovery and bank secrecy. See Geoffrey Sant, Court-Ordered Law Breaking: U.S. Courts Increasingly Order the Violation of Foreign Law, 81 Brooklyn L. Rev. 181 (2015). This is another iteration of such court-ordered law breaking. Magistrate Pitman found that a UK court could find that the defendants violated UK laws, but ordered the defendants to produce the documents at any rate.

An interesting side point is that even the Japanese banks can plausibly seek the protection of UK's data privacy laws--attesting to the ethereal nature of personal data that nonetheless gives rise to a territorial "hook."

Ongoing Case Highlight: In re Cathode Ray Tube CRT Antitrust Litig., No. 3:07-cv-5944SC (N.D. Cal.)

Summary:

In re CRT is an antitrust action alleged against numerous manufacturers of cathode ray tubes, i.e. the tubes that were inserted in boxy television sets and monitors before flat screens became the norm. The list of defendants reads like the Who's Who of major Asian manufacturers:  Chunghwa Picture Tubes, Hitachi, LG Electronics, Panasonic, Matsushita, Samsung, Toshiba, and so on. The lead plaintiffs for the class action are individuals, electronic goods merchants, and manufacturers of monitors and television (such as Viewsonic.)

One of the major points of contention in this case has been whether an indirect purchaser of CRT--i.e. purchaser of final products containing a CRT rather than that of the product directly. 

The parties appear to be nearing settlement.  On April 29, 2016, the court issued a housekeeping order requiring the parties that settled to file the settlement agreement with the court. The order is available at 2016 U.S. Dist. LEXIS 57612 (N.D. Cal. Apr. 29, 2016).