Case of the Day: Vista Peak Ventures v. Giantplus Tech. Co., 2019 U.S. Dist. LEXIS 144941 (E.D. Tex. Aug. 27, 2019)

Summary:

Plaintiff served a Taiwanese defendant by mail with a registered mail, return receipt requested. Defendant moved to dismiss based on defective service, arguing Taiwanese law prohibits service by mailing a summons directly to the defendant.

The court rejected the argument, finding that Taiwanese law does not prohibit service of process by mail. The court also found that "mail received" stamp sufficed as a signature.

Takeaway:

Taiwan always presents a tricky case because it is not a signatory to the Hague Convention. This decision seems a bit aggressive, but it certainly makes service of process in Taiwan easier.

Case of the Day: United States v. $148,500 of Blocked Funds in the Name of Trans Multi Mechs. Co., 2019 U.S. Dist. LEXIS 55388 (D.D.C. Mar. 29, 2019)

Summary:

The US government brought forfeiture action against impounded funds that was previously controlled by a Taiwanese national, who was sanctioned for dealing with North Korean entities through his corporations domiciled in Hong Kong. The claimant Taiwanese national appeared pro se, but could not raise a meaningful defense against the government's charges. The court granted the forfeiture action.

Takeaway:

Sanction cases are coming in hot and heavy! We are moving toward the world in which national security cases will become the bulk of white collar defense work, as US moves more toward a mercantilist trade policies. It is an area that is worth watching closely.

Case of the Day: Shi v. New Mighty United States Trust, 2019 U.S. App. LEXIS 7659 (D.C. Cir. Mar. 15, 2019)

Summary:

The same case previously was appealed to the D.C. Circuit, which reversed the district court's dismissal for lack of jurisdiction. Upon reversal, the defendants moved to dismiss based on forum non conveniens grounds. The district court granted the motion, holding Taiwan was an adequate alternate forum.

The circuit court reversed the district court's dismissal, finding that the district court abused its discretion in granting the forum non conveniens motion. The court noted the motion was raised seven years after the litigation began, and the district court did not give due consideration for the plaintiff's choice of forum in Washington D.C., which was the only available forum to sue the defendants. (The defendants were not amenable to service in Taiwan, but agreed to submit to jurisdiction there for the purpose of their forum non conveniens motion.)

Takeaway:

This case is bonkers. It's virtually unheard of to appeal a forum non conveniens decision and win. But it has been the case that the courts have been far too liberal in granting forum non conveniens motions, which were intended to be an extraordinary motion. Finally, there is a line somewhere.

Case of the Day: Cardona v. Hitachi Koki Co. 2019 Del. Super. LEXIS 67 (Del. Super. Ct. Feb. 5, 2019)

Summary:

Plaintiff sued a Japanese manufacturer of a nail gun, which caused him severe injuries. Plaintiff is a Maryland resident who was employed by a contracting company in Delaware, and was injured at a construction site in Delaware. The defendant manufacturer operates principally in Japan, designed the nail gun in Japan, and manufactured it in Taiwan. After a jurisdictional discovery, the defendant moved to dismiss for lack of personal jurisdiction.

The court denied the motion. The court found that there were at least two theories through which it could exercise long-arm jurisdiction over the defendant: (1) the defendant solicited business from the whole of U.S. market, including Delaware, through its U.S. subsidiary incorporated in Delaware (and doing business in Georgia); (2) the defendant could anticipate its products being sold in Delaware, as its U.S. subsidiary was in Delaware. In doing so, the court explicitly noted that Nicastro did not have a controlling majority, and Bristol-Myers did not apply because there was a clear nexus between the plaintiff and Delaware.

Takeaway:

Delaware state court's assault against the U.S. Supreme Court's personal jurisdiction doctrine continues! Along with Hedger (which I previously covered here), Delaware state courts have been defying the U.S. Supreme Court's tendency to reduce the reach of long arm jurisdiction, and instead explicitly adopted the "stream of commerce" theory disavowed in Nicastro and Bristol-Myers. It's a trend that bears watching.

Case of the Day: Packard v. City of New York, 2018 U.S. Dist. LEXIS 101618 (S.D.N.Y. June 18, 2018)

Summary:

Defendant City of New York moved to compel the plaintiff, who previously lived in New York but now resides in Taiwan, to appear in New York for a deposition. The plaintiff cross-moved to allow for deposition by video conference.

The court granted the cross-motion for video conference. The court first noted Taiwan was not a signatory to the Hague Evidence Convention, but the plaintiff may contact the U.S. State Department to conduct the deposition in Taiwan for a fee.

Takeaway:

It is always worth remembering--Taiwan is not a signatory to any of the Hague Conventions! That Taiwan is an advanced economy does not change this fact. This is also the first time I learned that the fees for conducting deposition through the State Department are somewhat hefty.  (Approximately $1200 in one-time fee and $300 per hour for the facilities.)

Milestones: Haung Tang v. Aetna Life Ins. Co., 523 F.2d 811 (9th Cir. 1975)

Summary:

Plaintiff is a mother of a decedent who was killed by her husband. The husband killed the decedent in San Diego, California, and thereafter fled to Taiwan. There, the husband was tried, convicted and incarcerated for homicide. The decedent had a life insurance policy, for which the husband was the primary beneficiary and the plaintiff mother was the alternate beneficiary. The mother sued to collect the life insurance proceeds; the husband cross-claimed, averring that because he killed his wife while being temporarily insane, he was not precluded from collecting the insurance proceeds. The district court found that the husband was precluded from litigating the insanity argument, because the husband raised the argument in the Taiwanese court and lost.

The Ninth Circuit reversed. The court found that while there may be some occasions in which issue preclusion is permissible with a foreign judgment, plaintiff failed to meet the burden of pleading and proving the identity of issues, because plaintiff provided no foundation for a conclusion that the insanity defense in Taiwan is the same as legal insanity under California law.

Takeaway:

It's an old case, but always a good lesson to remember: because estoppel is such a powerful weapon, it always requires active pleading and establishment.

Media Appearance: "Cryptocurrency Laws and Regulations in Asia" in Asia Business Law Journal

Vacation is over--time to get back in the saddle! Here is my contribution, together with Michael S. Kim and Daniel S. Lee of Kobre & Kim LLP, giving an overview of cryptocurrency laws of South Korea.

Under the proposed regulatory scheme, digital currency exchanges would be required to register with South Korea’s Financial Intelligence Unit, a sub-organization of the FSC that monitors transactional flows to prevent money laundering or other attempts to evade capital control measures. The exchanges would also need to comply with “Know Your Customer” and anti-money laundering regulations at levels similar to banks. The proposed legislation is currently pending before the National Assembly.

In addition to the FSC’s proposed regulatory scheme, there are several other pending bills regarding digital currency trades and taxation measures. These bills have remained pending due to local elections in South Korea, but given a general lack of resistance toward digital currency regulation, they are expected to pass in the National Assembly soon.

Cryptocurrency Laws and Regulations in Asia: South Korea [Asia Business Law Journal]

Case of the Day: B&M Kingstone, LLC v. Mega Int'l Commercial Bank Ltd., 2018 N.Y. Misc. LEXIS 1515 (N.Y. Sup. Ct. Apr. 25, 2018)

Summary:

Plaintiff is a judgment creditor of a Florida state court judgment rendered in 2003, valued $39 million at the time and currently worth $73 million. The judgment debtor, allegedly, owns a property in Panama for which the defendant Taiwanese bank (with a branch in New York) holds the mortgage. The plaintiff previously served deposition subpoenas to the bank, which was quashed. Subsequently, the New York State Department of Financial Services found the bank in violation of anti-money laundering rules. The plaintiff then served subpoenas again. The defendant moved to quash.

The court found that the intervening event of the NY DFS enforcement action was sufficient to establish the defendant may be holding relevant information. The court, however, denied the plaintiff's motion for contempt.

Takeaway:

The lesson here is just how broad the discovery reach is for a judgment creditor. Based on the facts adduced in the opinion, it appears unlikely that the defendant bank is holding any property of the judgment debtor upon which the plaintiff may execute. Yet an intervening government enforcement action is enough to renew the subpoena that was previously denied.

Case of the Day: Allianz Global Risks US Ins. Co. v. Latam Cargo USA, 2018 U.S. Dist. LEXIS 59965 (E.D.N.Y. Mar. 31, 2018)

Summary:

Plaintiff insurance company, acting on a subrogated claim, sued cargo companies based an erroneous shipping of fresh cherries that was supposed to be delivered from Chile to Taiwan via Miami. In actuality, the cherries were delivered from Chile to Argentina to Brazil to New York, then Taiwan. Because of the longer time for delivery, the cherries suffered total loss due to decay and mildew. Defendants moved to dismiss based on lack of subject matter jurisdiction, because Warsaw Convention of 1929 governed the suits arising from carriage of goods. If the Warsaw Convention applies, the suit cannot be brought in the United States.

The court found that the Warsaw Convention did not apply. The dispute was whether China's accession to the Warsaw Convention means Taiwan, which became independent thereafter, is also a signatory to the treaty. Based on the amicus brief submitted by the United States submitted in a similar case in the 9th Circuit, the court determined the executive branch deems Taiwan as not a signatory to the Warsaw Convention, and the court must follow the executive branch's determination.

Takeaway:

Adventure times with Taiwan's legal status continues! With all these sovereign states talking about splitting off or coming together--like Brexit, Scottish independence, Korean reunification--it wouldn't be a bad idea to brush up on the treaty status of the sovereigns in these situations.

Case of the Day: Blue Spike, LLC v. ASUS Comput. Int'l, Inc., 2018 U.S. Dist. LEXIS 48349 (E.D. Tex. Feb. 20, 2018)

Summary:

Plaintiff served the defendant, a Taiwanese corporation, through the U.S.-based registered agent of the defendant's subsidiary. After the defendant failed to appear, the plaintiff moved for a default judgment. The defendant claimed the service of process was improper.

The court held in favor of the defendant. Because there was no alter ego relationship between the Taiwanese parent corporation and its U.S. subsidiary, service on the subsidiary did not constitute service on the parent. That the parent company used the subsidiary as a conduit was not sufficient. 

Takeaway:

This is the correct result, as Ted Folkman noted previously at his blog Letters Blogatory. For my part, I am more curious about the "conduit" argument that the plaintiff advanced--which is a New York test that is arguably less demanding compared to Texas test of requiring an alter ego. (To be sure, it is still quite demanding.) I wonder if the attorney was arguing the Texas standard was unduly difficult to meet.

Also notable that Taiwan is one of the few major economies that is not a signatory to the Hague Service Convention.

Case of the Day: Feinberg v. Enova Tech. Corp., 2018 Cal. App. Unpub. LEXIS 1582 (Cal. Ct. App. Mar. 7, 2018)

Summary:

Attorney sued the former client over unpaid legal fees. The defendant was a Taiwanese corporation with principal place of business in Taiwan. The plaintiff served the defendant by serving the California residence of the corporation's CEO. The process server delivered the summons to a woman at the residence who identified herself as the president's wife. The defendant moved to dismiss based on improper service.

The court found that even though it was not clearly established that the CEO receives mail at the California residence, the personal delivery combined with emailing the summons to the CEO (who acknowledged receipt) was sufficient to establish valid service. 

Takeaway:

Do be very careful with this case, because it is an unpublished case and therefore uncitable under California rules. That said, it is interesting how service of process on a foreign defendant can often be cobbled together in this manner. It is not the recommended route, but sometimes it may be the only path available.

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.

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.

Case of the Day: Kowal v. Westchester Wheels, Inc., 2017 IL App (1st) 152293 (Ill. App. Ct. Sept. 8, 2017)

Summary:

Defendant-appellant Giant Manufacturing, a Taiwanese bicycle maker, appealed the trial court's denial of its motion to dismiss. The plaintiff-appellee purchased the bicycle from Illinois from Giant's authorized distributor, and was injured while participating in a bicycle race in Iowa. Giant Manufacturing distributed its bicycles through a Virginia corporation called Giant Bicycle. Giant Manufacturing itself had no contact with Illinois, as it was not a party to contract with an Illinois person and did not directly conduct any business in Illinois otherwise.

The court engaged in an extensive discussion of the stream-of-commerce theory in the U.S. Supreme Court jurisprudence, and found that in Nicastro, the Supreme Court endorsed a "narrow" version of the stream-of-commerce theory. But the court also noted Russell v. SNFA, 987 N.E. 2d 778 (Ill. 2013), in which the Illinois Supreme Court interpreted Nicastro and held a knowing use of an American distributor to market its product throughout the United States is sufficient minimum contacts for long-arm personal jurisdiction. Accordingly, the court denied the appeal.

Takeaway:

Plaintiffs' counsels, get thee to Illinois right now! Amid the consisten trend across the board for U.S. courts to pull back the reach of long-arm jurisdiction, Illinois state court issued a clear directive that it would adhere to the old model of the stream-of-commerce theory under Asahi Metal. At the state court level, there seems to be a trend of resisting the federal jurisprudence on long-arm jurisdiction. (Hedger v. Medline from Delaware state court comes to mind.) The law in this area may end up developing in the same manner as the securities class action litigation, where the federal law's pull-back caused the plaintiffs to resort to the state courts that went contrary to the federal trend.

Case of the Day: Apple Inc. v. Qualcomm Inc., 2017 U.S. Dist. LEXIS 145835 (S.D. Cal. Sept. 7, 2017)

Summary:

Apple sued Qualcomm in the Southern District of California as well as in a number of countries, including Japan, China, Taiwan and UK, alleging essentially that Qualcomm refused to offer a fair licensing deal for the Qualcomm's patents that set the 3G and 4G cellular communication standards. In response, Qualcomm filed for an anti-suit injunction as to all foreign actions.

The court denied the motion. The court found the U.S. litigation would not dispose of the foreign actions because there were no identity of issues. The court also found Apple and Qualcomm had no contractual relationship, which made inapplicable Microsoft Corp. v. Motorola, Inc., 696 F.3d 872 (9th Cir. 2012), in which the Ninth Circuit granted the anti-suit injunction. The court further found the foreign actions were not vexatious or threatening to its jurisdiction, or otherwise frustrate the home forum's public policy.

Takeaway:

As telecom industry becomes even more global, it is pushing all of the private international law devices in the U.S. civil procedure to a breaking point. Wisely, the court here backed off perhaps the most controversial device in the U.S. private international law. But Qualcomm's attorneys (an all-star team made up of Quinn Emanuel, Cravath Swain & Moore and Jones Day) were right to try the tack. How much longer before an adventurous U.S. court wreaks a global havoc in the telecom industry with an anti-suit injunction?

Case of the Day: Wang v. New Mighty United States Trust, 2016 U.S. App. LEXIS 21878 (D.C. Cir. Dec. 9, 2016)

Summary:

Previous to passing away, Taiwanese billionaire set up trusts in the United States, one of which was in Washington D.C., apparently in order to reduce the share of his estate that would go to his surviving wife. The representative for the surviving wife sued the D.C. trust after the billionaire passed away.

The district court dismissed based on lack of subject matter diversity, as there was no complete diversity. The district court held that citizenship of a trust is to be determined by referring to the citizenship of the trust's beneficiaries. The district court found that, because the trust's beneficiaries included non-U.S. citizen aliens, no complete diversity existed as both the plaintiff and the defendant were aliens.

The D.C. Circuit reversed on this issue, holding that a traditional trust takes on the citizenship of its trustee. Because the trustee was another trust whose citizenship was Virginia and Washington D.C., complete diversity existed.

Takeaway:

Quick--how many of you already knew that federal courts had no jurisdiction over litigation between two aliens? I only learned this a few years ago, and this factoid catches many attorneys by surprise.

This decision has a great deal of practical and academic implications. Citizenship of a business organization is a consistent issue in international litigation. As a theoretical matter, it is not entirely clear what purpose it serves to have this convoluted determination of citizenship for complex business organizations, other than to make corporate structures opaque and make the entities less amenable to suit?

Case of the Day: Tatung Co. v. Shu Tze Hsu, 2016 U.S. Dist. LEXIS 157450 (C.D. Cal. Nov. 14, 2016)

Summary:

Plaintiff Taiwanese company had a judgment against a U.S. company enforceable in California, but allegedly could not collect on the judgment because the defendants engaged in a RICO conspiracy to drain the assets of the U.S. company through a series of fraudulent transfers. Defendants claimed that the RICO claim must be dismissed, because after RJR Nabisco, foreign injuries are not recoverable under RICO.

The court found that foreign plaintiffs may sue under RICO against U.S. defendants, even for foreign injuries. In doing so, the court disagreed with Bascunan v. Elsaca, 2016 WL 5475998 (S.D.N.Y. Sept. 28, 2016), which held otherwise.

Takeaway:

Courts disagreeing with each other! Exciting times. Territoriality and extraterritoriality are hot topics now, and it will be extremely interesting to see how far RJR Nabisco will extend. Expect a circuit split on this topic at some point.

Case of the Day: State v. LG Elecs., 2016 Wash. LEXIS 834 (Wash. July 21, 2016)

Summary:

Defendants are numerous manufacturers of cathode ray tube (CRT) monitors. The state of Washington sued the defendants for price-fixing; the defendants moved to dismiss, claiming that there was no personal jurisdiction simply because their CRT monitors arrived at Washington through the stream of commerce.

The court found that some jurisdictional discovery was warranted, and affirmed the lower court opinions denying the motion to dismiss.

Takeaway:

The divided Washington Supreme Court essentially ignored the U.S. Supreme Court's holding in Nicastro, which held that the stream of commerce theory was invalid. It would not be surprising to see this case before the Supreme Court.

Ongoing Case Highlight: In re Cathode Ray Tube (CRT) Antitrust Litig., 2016 U.S. Dist. LEXIS 102408 (N.D. Cal. Aug. 3, 2016)

Summary:

After the settlements, the lead counsel requested an attorneys fee award amounting to 30 percent of the total settlement amount. The court found that the case was complex and the plaintiffs' counsel achieved fairly strong result, and approved the award.

Takeaway:

This was a huge case whose damages could have been up to $2.8 billion. The settlement amount is significantly lower, but it was not cheap. To give a rundown of the payouts:

• Chunghwa:  $10 million
• TDA:  $13.75 million
• LG Electronics:  $25 million
• Hitachi:  $28 million
• Toshiba:  $30 million
• Panasonic:  $70 million
• Phillips:  $175 million
• Samsung SDI:  $225 million

This resulted in the $173 million in attorneys fee for the plaintiffs and more than $7 million in cost reimbursement.

Case of the Day: State v. LG Electronics, 2016 Wash. LEXIS 828 (Wash. July 14, 2016)

Summary:

The state attorney general of Washington brought suit alleging price-fixing among manufacturers of CRT monitors based on Washington state consumer protection law. The defendants argued that the statute of limitations (4 years) had passed under Washington law. The Supreme Court of Washington held that action by the government is exempt from statute of limitations.

Takeaway:

This appears to be based on the same set of conducts underlying In re CRT Antitrust Litigation that this blog has been monitoring. Only four states--Washington, Connecticut, Oregon and Virginia--lack the time limit on actions brought by the government under consumer protection law.