International Law Update

CRIMINAL LAW

Where Korean citizen was prosecuted for bribery in Korean court and later in U.S. federal court based on same facts, Fifth Circuit affirms U.S. conviction [1] because Convention on Combating Bribery of Foreign Public Officials in effect in both nations does not bar multiple prosecutions for same conduct and [2] because U.S. did not waive jurisdiction nor [3] has it adopted doctrine of international double jeopardy

Beginning in 2001, Gi‑Hwan Jeong, a citizen of South Korea, was successfully bribing two U.S. officials to obtain a $206 million contract relating to the U.S. Army and Air Force Exchange Service (AAFES) for his company, Samsung Rental Company, Ltd. (SRT). Under the contract, SRT would provide internet and other telecommunication services to U.S. military installations in South Korea.

Jeong came under investigation by U.S. and South Korean investigators. AAFES terminated the contract with SRT in 2007, and in 2008 a South Korean court convicted Jeong of bribing U.S. officials. The court sentenced him to time served (58 days) as well as to pay a fine of about $10,000.

That, however, was far from ending the U.S. investigation. The U.S. requested assistance pursuant to the Treaty Between the United States of America and the Republic of Korea on Mutual Legal Assistance in Criminal Matters, U.S.‑South Korea, November 23, 1993, S. Treaty Doc. No. 104‑1 (1995) [in force May 23, 1997]. The request acknowledged Jeong’s conviction and stated that the U.S. was not seeking to prosecute.

AAFES then invited Jeong to a meeting in Dallas, Texas, for a discussion. Jeong did in fact travel to the U.S. where the U.S. arrested him upon arrival. A Grand Jury then indicted Jeong for federal bribery under 18 U.S.C. 201(b)(1), conspiracy under 18 U.S.C. 371, and wire fraud under 18 U.S.C. 1343 and 1346.

Jeong moved to dismiss the indictment claiming that the U.S. lacked jurisdiction to prosecute him. In particular, he argued [1] that the federal bribery statute does not apply extraterritorially; [2] that the prosecution violates the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (December 17, 1997, S. Treaty Doc. No. 105‑433 (1998)) [in force February 15, 1999] (Convention) of the Organization for Economic Cooperation and Development (OECD); and [3] that Article 4.3 of the Convention bars multiple prosecutions for the same offense. Both the U.S. and South Korea are signatories to the Convention.

The Korean Ministry of Justice submitted a statement to the district court supporting Jeong’s motion to dismiss. It contended that the U.S. had not timely asserted jurisdiction to prosecute Jeong, as confirmed in the U.S. request under the Mutual Assistance Treaty; thus, the U.S. had effectively waived that right. The district court denied the motion [1] because federal bribery laws do in fact apply extraterritorially and [2] because the Convention does not bar multiple prosecutions. Jeong pleaded guilty but exercised his right to appeal the denial of his motion to dismiss. The U.S. Court of Appeals for the Fifth Circuit, however, affirms Jeong’s American conviction.

According to Jeong, the Convention bars a signatory party from prosecuting a foreign national whose alleged offenses had occurred abroad. Article 4.3 of the Convention provides that, when more than one jurisdiction can prosecute, the governments involved should—at the request of one of them—consult to determine the most appropriate jurisdiction for prosecution.

The Court of Appeals, however, disagrees. “We apply the traditional canons of interpretation to Article 4.3. ‘The interpretation of a treaty, like the interpretation of a statute, begins with its text.’… We must interpret the text ‘in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in light of its object and purpose.’ … Only if the language of a treaty, when read in the context of its structure and purpose, is ambiguous may we ‘resort to extraneous information like [1] the history of the treaty, [2] the content of negotiations concerning the treaty, and [3] the practical construction adopted by the contracting parties.’ … Finally, [4] we may not ‘alter, amend, or add to any treaty, by inserting any clause, whether small or great, important or trivial,’ for to do so ‘would be … an usurpation of power, and not an exercise of judicial function.’ …”

“Applying these canons, we conclude that the plain language of Article 4.3 does not prohibit two signatory countries from prosecuting the same offense. Rather, the provision merely establishes when two signatories must consult on jurisdiction. Article 4.3 states that two signatories with concurrent jurisdiction over a relevant offense must, ‘at the request of one of them,’ consult on jurisdiction.”

“The phrase ‘at the request of one of them’ is a dependent clause that conditions the consultation requirement upon the existence of a request. Where no such request is made, then, the ordinary reading of Article 4.3 is that consultation is not required. Jeong is, therefore, incorrect that the provision requires consultation in every instance of concurrent jurisdiction. In the case at hand, the record shows that neither the U.S. nor South Korea requested consultation on their concurrent jurisdiction to prosecute Jeong. That they did not consult on jurisdiction, therefore, does not violate Article 4.3.”

“Even if the U.S. and South Korea had been required to consult on jurisdiction, however, it would not follow that only one of the two nations could prosecute Jeong. Article 4.3 requires that consultation be made ‘with a view to determining the most appropriate jurisdiction for prosecution.’ Jeong argues that because the provision uses the singular, not plural, form of ‘jurisdiction,’ prosecution of an offense may be had in only one jurisdiction.”

“But this reading impermissibly engrafts additional requirements on the clause, and we may not ‘alter, amend, or add to’ the plain language of a treaty. … The plain language of the clause provides that where consultation is required, the parties need only consult ‘with a view to determin[e]’_the jurisdictional question ‑‑ they need not actually answer it. And, most significantly, the provision requires nothing more than consultation upon request; it does not require any additional actions of the party countries.” [711‑712].

Alternatively, Jeong argues that the U.S. expressly and impliedly waived jurisdiction, and, therefore. the indictment is invalid. Again, the Court disagrees. “Implicit in Jeong’s argument is a presumption that although the U.S. and South Korea both had the right to prosecute him for his offenses, only one of the two countries was permitted to exercise that right. Operating under this [alleged] presumption, Jeong argues that the U.S. impliedly and expressly ceded its right of prosecution to South Korea.”

FOREIGN LAW; DETERMINATION OF

In dispute over scope of international marketing of French coffee maker design, Seventh Circuit interprets Federal Rule of Civil Procedure 44.1 on proof of foreign law as allowing federal court in interpreting French contract to give greater weight to scholarly treatises on foreign law than to partisan expert testimony

Bodum USA, Inc. (Bodum) sued La Cafetiere, Inc. (La Cafetiere) in a U.S. district court in Illinois, alleging that La Cafetiere’s coffee maker violates Bodum’s common‑law trade dress for the Chambord design. The Chambord is a French‑press coffee maker in which hot water is mixed with ground coffee, and the user pushes down a rod with a mesh screen to separate the coffee grounds. There was a patent on the Chambord design, but it expired many years ago. Both the Chambord and the Cafetiere design are very similar.

A “trade dress” is a distinctive appearance that enables consumers to identify a product’s maker, and is a form of protectable trademark. While the Chambord design is not registered as Bodum’s trademark, common‑law marks may be enforced under both 15 U.S.C. 1125(a) (part of the Lanham Trademark Act), and the Illinois Uniform Deceptive Trade Practices Act (815 ILCS 510/2(a)).

From the mid‑1950s through 1991, the French company Societe des Anciens Etablissements Martin S.A. (Martin) was marketing the Chambord. When Bodum’s Holding Company acquired Martin under a contract in French that seemed to provide that one of the related companies, Household Articles, Ltd. (Household), a British company, had limited distribution rights. Under the Agreement, however, Household was never [1] to sell a French‑press coffee maker in France, [2] to use the Chambord trade name, and [3] to use any of Martin’s distribution channels for 4 years.

In response, Household argued that the Agreement allows it to sell its coffee maker anywhere in the world, except in France, as long as it does not use the Chambord designation. The District Court agreed and gave summary judgment to Household. Bodum appealed. The U.S. Court of Appeals for the Seventh Circuit, however, affirms.

While the Agreement appears to grant Household the right to distribute similar products as long as certain conditions are met, Bodum contends that, under French law, the parties’ intent prevails over the written word. Article 1156 of the French Civil Code provides that “One must in agreements seek what the common intention of the contracting parties was, rather than pay attention to the literal meaning of the terms.”

Bodum presented an affidavit that it understood the Agreement to mean that Household could sell the coffee maker only in the United Kingdom and Australia. In support, it presented the testimony of a French law professor, which Household countered with two expert statements of its own.

“Although Federal Rule of Civil Procedure 44.1 provides that courts may consider expert testimony when deciding questions of foreign law, it does not compel them to do so ‑‑ for the Rule says that judges ‘may’ rather than ‘must’ receive expert testimony and adds that courts may consider ‘any relevant material or source’. Judges should use the best of the available sources.”

“The Committee Note in 1966, when Rule 44.1 was adopted, explains that a court ‘may engage in its own research and consider any relevant material thus found. The court may have at its disposal better foreign law materials than counsel have presented, or may wish to re‑examine and amplify material that has been presented by counsel in partisan fashion or in insufficient detail.’”

“Sometimes federal courts must interpret foreign statutes or decisions that have not been translated into English or glossed in treatises or other sources. Then experts’ declarations and testimony may be essential. But French law, and the law of most other nations that engage in extensive international commerce, is widely available in English. Judges can use not only accepted (sometimes official) translations of statutes and decisions but also ample secondary literature, such as treatises and scholarly commentary.”

“It is no more necessary to resort to expert declarations about the law of France than [1] about the law of Louisiana, which had its origins in the French civil code, or [2] about the law of Puerto Rico, whose origins are in the Spanish civil code. No federal judge would admit ‘expert’ declarations about the meaning of Louisiana law in a commercial case.”

RICO STATUTE

In litigation by U.S. company over majority ownership of Russian oil company stock, Second Circuit confirms that RICO statute does not apply extraterritorially based on Supreme Court’s recent bright‑line test formulated in Morrison v. Nat’l Austl. Bank Ltd.

Norex Petroleum Limited (Norex) alleged that several companies and individuals (Defendants) engaged in a massive racketeering scheme to control the Russian oil company Yugraneft. As a result, former majority shareholder Norex became a minority shareholder. While most of the alleged acts took place in Russia, Defendants allegedly committed some constituent acts in the U.S., such as mail and wire fraud, as well as money laundering.

Norex filed the complaint in New York federal court based on the Racketeer Influenced and Corrupt Organization Act, 18 U.S.C. § 1961 et seq. (RICO). After some procedural gyrations, the Defendants jointly moved to dismiss. The district court found that it lacked jurisdiction under RICO, and granted the motion. Norex appealed. The U.S. Court of Appeals for the Second Circuit, in a per curiam opinion, holds that RICO lacks a clear congressional statement of extraterritorial reach, thus barring Plaintiff’s RICO claims.

The issue here is whether a U.S. court has jurisdiction in a RICO case where the conspiracy involves primarily foreign actors and foreign conduct. While this case was under consideration, the Supreme Court issued Morrison v. Nat’l Austl. Bank Ltd., 130 S. Ct. 2869 (2010). In Morrison, the Supreme Court rejected the “conduct and effect” test that the Second Circuit had previously been applying to determine a statute’s extraterritorial application. Absent a clear Congressional expression of its intent to grant a statute extraterritorial application, a statute lacks this reach. Id. at 2877.

“[W]e find [that] the district court erred in dismissing Norex’s first amended complaint for lack of subject matter jurisdiction. Rather, the analysis of RICO’s extraterritorial reach must be conducted under the auspices of Fed. R. Civ. P. 12(b)(6). [...]”

“Morrison wholeheartedly embraces application of the presumption against extraterritoriality, finding that ‘unless there is the affirmative intention of the Congress clearly expressed to give a statute extraterritorial effect, we must presume it is primarily concerned with domestic conditions.’ Id. at 2877‑78 … The Morrison Court rejected various tests devised over the years to divine a statute’s extraterritorial application in favor of a bright line rule: ‘[w]hen a statute gives no clear indication of an extraterritorial application, it has none.’ Id. at 2878.”

“Our Court’s precedent holds that ‘RICO is silent as to any extraterritorial application.’ … While Norex urges us to consider this statement dicta, we cannot do so. The finding that RICO is silent as to its extraterritorial application is a key holding of the opinion, because it is only upon finding RICO silent as to its extraterritorial application that the [Second Circuit] turned to its now‑abrogated analysis of RICO’s extraterritorial application under the conduct and effects test. …”

“Even if we were to revisit [the Second Circuit [former] precedent], Norex’s arguments are unavailing. First, Norex argues that RICO § 1962(a)‑(d) applies to ‘any enterprise which is engaged in, or that activities of which affect, interstate or foreign commerce.’ … Morrison forecloses that argument, noting that ‘we have repeatedly held that even statutes that contain broad language in their definitions of commerce do not apply abroad.’ Supra at 2882.”

EUROPEAN UNION COPYRIGHT LAW

Although Calvin Klein, U.S. Plaintiff, challenged European registration of later trademark by Spanish company that manufactures same varieties of leather goods as Plaintiff’s, European Court of Justice upholds adverse ruling by trial court and holds that Spanish Defendant’s proposed new mark is so distinctively different that average EC consumer would be unlikely to confuse it with Plaintiff’s well‑established mark

In its appeal, Calvin Klein Trademark Trust (Plaintiff), incorporated in Wilmington, Delaware, USA, seeks to persuade the European Court of Justice (ECJ) to set aside the judgment of the General Court (GC) [formerly the Court of First Instance of the European Communities (EC)] dated May 7, 2009. The GC had dismissed Plaintiff’s action to overturn the decision of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM). By that decision, the OHIM Board of Appeal had rejected Plaintiff’s opposition to the application lodged by Zafra Marroquineros SL of Spain (Defendant) to register Defendant’s word mark: “CK CREACIONES KENNYA” as a valid EC trade mark.

(N.B. Council Trade Mark Regulation (EC) No 207/2009 of February 26 2009 (OJ 2009 L 78, p. 0001), in force as of April 13, 2009 has repealed Council Trademark Regulation (EC) No 40/94 of December 20, 1993. At the time of the activities involved here, however, Regulation 40/94 was still in effect and hence governs the present case.)

Article 8(1)(b) of Regulation No 40/94 provided as follows: “Upon opposition by the proprietor of an earlier trade mark, the trade mark applied for shall not be registered: ¼ (b) if, because of its identity with, or similarity to the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks, there exists a likelihood of confusion on the part of the public in the territory in which the earlier trade mark is protected; ¼ the likelihood of confusion includes the likelihood of association with the earlier trade mark.”

Article 8(5) of Regulation No 40/94 provided that “upon opposition by the proprietor of an earlier trade mark within the meaning of paragraph 2, the trade mark applied for shall not be registered where it is identical with, or similar to, the earlier trade mark and is to be registered for goods or services which are not similar to those for which the earlier trade mark is registered, where in the case of an earlier Community trade mark the trade mark has a reputation in the Community and, in the case of an earlier national trade mark, the trade mark has a reputation in the Member State concerned and where the use without due cause of the trade mark applied for would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.”

Article 51(1)(b) of Regulation No 40/94 further provided as follows: “A Community trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings, ¼ (b) where the applicant was acting in bad faith when he filed the application for the trade mark.” On October 7, 2003, the Defendant applied to the OHIM to register the word sign “CK CREACIONES KENNYA” as a valid EC trade mark.

The Defendants belong to Classes 18 and 25 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of June 15, 1957, as revised and amended. Class 18 includes leather and imitations of leather, and goods made of these materials and not included in other classes; animal skins; trunks and travelling bags; umbrellas, parasols and walking sticks; whips, harness and saddler. Moreover, Class 25 includes “clothing, footwear, headgear”.

On September 6, 2004, the Plaintiff filed its opposition to Defendant’s registration of the mark. Plaintiff’s opposition rested on all the goods and services covered by its earlier marks and opposed all the goods covered by Defendant’s trade mark application. On December 22, 2005, the OHIM rejected the opposition in its entirety. It found that there was no likelihood of confusion between the marks at issue for the relevant consumers. On March 29, 2007, the Second Board of Appeal dismissed the Plaintiff’s internal appeal.

By application lodged at the Registry of the General Court (GC) on May 29. 2007, Plaintiff, Calvin Klein, sued to annul the contested decision and for an order that OHIM should refuse to register Defendant’s proposed trade mark. Plaintiff relied on a single plea, alleging infringement of Article 8(1) and (5) of Regulation No 40/94. The GC dismissed the action by finding that the lack of similarity between the signs at issue stems from the visual, phonetic and conceptual differences between the signs.

As to the likelihood of confusion, the GC considered that it was inappropriate to conclude that there was a likelihood of confusion in the absence of any similarity between the marks at issue. The fact that the goods covered by the conflicting marks are identical does not alter that assessment. Moreover, although marks with a highly distinctive character on account of their reputation do enjoy broader protection, the recognition here of the reputation of the earlier marks cannot call into question the finding that the marks at issue create overall impressions which are too distinctive for it to be found that there is a likelihood of confusion.

Plaintiff Klein duly appealed to the ECJ which assigned its case to the First Chamber. The Plaintiff relies on two grounds; it contends that there was an infringement not only [1] of Article 8(1) of Regulation No 40/94 but also, [2] of Article 8(5) of that Regulation. The ECJ, however, disagrees and upholds the [GC’s] ruling. The following are edited excerpts from the ECJ’s opinion.

Para. 43. “As regards the first part of the first ground of appeal, Article 8(1)(b) of Regulation No 40/94 provides that, upon opposition by the proprietor of an earlier trade mark, the mark applied for is not to be registered if, because of its identity with. or similarity to, the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks, there exists a likelihood of confusion on the part of the public in the territory in which the earlier trade mark is protected. According to that provision, such a likelihood of confusion includes the likelihood of association with the earlier trade mark.”

44. “According to the settled case‑law of the Court, the existence of a likelihood of confusion on the part of the public must be appreciated globally, taking into account all factors relevant to the circumstances of the case [Cites].”

45. “It is also apparent from settled case‑law that the global assessment of the likelihood of confusion, in relation to the visual, aural or conceptual similarity of the marks in question, must be based on the overall impression given by the marks, bearing in mind, in particular, their distinctive and dominant components. The perception of the marks by the average consumer of the goods or services in question plays a decisive role in the global appreciation of that likelihood of confusion. The average consumer normally perceives a mark as a whole and does not proceed to analyze its various details. [Cites].”

46. “¼ [T]he similarity of the marks at issue must be assessed from the point of view of the average consumer by referring to the intrinsic qualities of the marks and not to circumstances relating to the conduct of the person applying for a Community trade mark.”

47. “It must therefore be held that, contrary to the [Plaintiff’s] submissions in the first part of its first ground of appeal, the [GC’s] analysis is not vitiated by an error of law due to the fact that it failed to take account of alleged wrongful conduct on the part of the trade mark applicant. While such conduct is a particularly significant factor in proceedings brought under Article 51(1)(b) of Regulation No 40/94 ‑‑ which is not at issue in the present appeal ‑‑ it is not, on the other hand, a factor that must be taken into account in opposition proceedings brought under Article 8 of that regulation. 48. It follows that the first part of the first ground of appeal must be dismissed as unfounded.”

49. “As regards the second part of that ground of appeal, alleging distortion of the facts, it should be noted at the outset that, under Article 225(1) EC and the first subparagraph of Article 58 of the Statute of the Court of Justice, an appeal lies on a point of law only. The [GC] [is a trial court of general jurisdiction and thus] has exclusive jurisdiction to find and appraise the relevant facts and to assess the evidence. The appraisal of those facts and the assessment of that evidence thus does not ‑‑ save where they distort the evidence ‑‑ constitute a point of law which is subject, as such, to review by the Court of Justice on appeal. [Cites].”

50. “The assessment of the similarities between the signs at issue is of a factual nature and, save where the evidence and facts are distorted, is not subject to review by the Court of Justice. Such distortion must be obvious from the documents on the Court’s file, without there being any need to carry out a new assessment of the facts and the evidence. [Cites].”

51, 52. “The [Plaintiff] has failed to produce any evidence which would make it possible to consider that the [GC] distorted the facts by finding, ¼that the lack of any similarity between the signs at issue stems from the visual, phonetic and conceptual differences between the signs. The [Plaintiff’s] argument that the distortion derives from the fact that the GC failed to take account of [Defendant’s] conduct must be disregarded since, ¼, that court was not required to take such conduct into account when carrying out its assessment. Accordingly, the second part of the first ground of appeal must be rejected as unfounded.”

53. “As regards the third part of the first ground of appeal, it should be noted, first, that, where there is no similarity between the earlier mark and the mark applied for, the reputation of, or the well‑known nature attaching to, the earlier mark and the fact that the goods or services concerned are identical or similar are not sufficient for it to be found that there is a likelihood of confusion between the marks at issue. [Cites].”

54. “In the judgment under appeal, the [GC] found that there was no similarity between the marks at issue. It stated, ¼ that the visual, phonetic and conceptual examination of the marks shows that the overall impression created by the [Plaintiff’s] earlier marks is dominated by the element ‘ck’ whereas that created by the trade mark applied for is dominated by the element ‘creaciones kennya’, concluding that the lack of similarity between the signs at issue thus stems from their visual, phonetic and conceptual differences.”

55. “In order to reach that conclusion, the [GC] carried out, ¼ an analysis forming part of the process the purpose of which is to determine the overall impression created by the marks at issue and to carry out a global assessment of the similarity of the marks. Thus, ¼ it conducted a detailed analysis of the mark applied for, taken as a whole, taking into account in particular how the average consumer perceives the mark. That analysis was followed, ¼ by an examination of the visual, phonetic and conceptual similarity of the marks at issue.”

56. “¼ [T]he existence of a similarity between two marks does not presuppose that their common component forms the dominant element within the overall impression created by the mark applied for. According to established case‑law, in order to assess the similarity of two marks, it is necessary to consider each of the marks as a whole, although that does not rule out the possibility that the overall impression created in the mind of the relevant public by a complex trade mark may, in certain circumstances, be dominated by one or more of its components. It is only if all the other components of the mark are negligible, however, that the assessment of the similarity can be carried out solely on the basis of the dominant element.” [Cites]. In that connection, it is sufficient for the common component not to be negligible.”

57. “[I]t is clear, however, that the [GC] found, first, that the overall impression created by the mark applied for is dominated by the element ‘creaciones kennya’, on which the consumer concerned will to a very great extent focus his attention and, second, ,,, that the element ‘ck’ occupies only an ancillary position in relation to that element, which, in essence, amounts to a conclusion that the element ‘ck’ in the mark applied for is negligible.”

58. “Thus, having ruled out, on the basis of a properly conducted analysis, any similarity between the marks at issue, the [GC] correctly concluded, ¼ that, notwithstanding the reputation of the earlier marks and the fact that the goods covered by the marks at issue are identical, there is no likelihood of confusion between the marks.”

59, 60. “The third part of the first ground of appeal must therefore be declared unfounded. In those circumstance, the first ground of appeal must be rejected.”

61. “By its second ground of appeal, the [Plaintiff] criticises the G C for failing to have regard to Article 8(5) of Regulation No 40/94 by failing to examine the reputation of the earlier marks in the context of that provision.”

62. “The [GC] did err by stating, ¼ that the [Plaintiff] relie[d] on a single plea in law, alleging infringement of Article 8(1)(b) of Regulation No 40/94, whereas the application was also expressly based on infringement of Article 8(5) of that Regulation.”

63. “By stating that, since the marks at issue are not similar, there was no need to consider the reputation of the earlier marks, the GC erred in law. In the [Plaintiff’s] view, account should have been taken of the fact that Calvin Klein’s earlier mark, ‘cK,’ is well known in determining whether it should be afforded greater protection. The reputation of an earlier mark should be considered in the course of the assessment of the similarity between the marks at issue and not after similarity has been established.”

64. “¼ [Plaintiff] submits that, if the well‑known ‘cK’ marks were protected only when the letters ‘cK’ were used by third parties with the same mode of graphic representation, that would be tantamount to conferring on the well‑known mark CK a lower level of protection in practice than it would enjoy if it was not widely known. The fact that the ‘cK’ trade marks, along with other distinct graphic representations of those letters, are well known protects them against the use of the letters ‘CK’ in the fashion sector, since, in that sector, those letters are identified with ‘Calvin Klein,’ so that the use of those letters by a third party would lead to confusion by association.”

ALIEN TORT CLAIMS ACT

Eleventh Circuit affirms dismissal of Alien Tort Claims Act suit against Palestine Authority and PLO in case of Israeli citizen murdered while driving within Gaza Strip, and rules that single murders committed by private actors during isolated armed skirmishes do not give rise to ATCA’s international jurisdiction

Ahuva Amergi, an Israeli citizen (Deceased), was shot and killed during a firefight in 2002 while she was simply driving her car in the Gaza Strip. Her estate and her survivors (Plaintiffs) sued the Palestinian Authority (PA) and the Palestine Liberation Organization (PLO) (Defendants) in the U.S. District Court for the Southern District of Florida. The Plaintiffs charged that Deceased died in the course of an armed conflict, and that the district court had subject matter jurisdiction based on the Alien Tort Claims Act (ATCA).

The Complaint alleges that Yaser Mahmud Alkativ, a Commander of the Palestinian Intelligence Services, recruited Muhamad Al Katzir to commit terrorist acts. Alkativ sent a videotape to Katzir describing his assigned terrorist acts. Soon thereafter, Katzir travelled near Kisufim, Israel, armed with an AK‑47 and explosives. There he opened fire on several cars, killing the Deceased. Katzir then died in the ensuing firefight with Israeli Defense Forces.

The district court dismissed the complaint for lack of subject matter jurisdiction on the grounds that ATCA does not apply to random acts of terrorism. The Plaintiffs noted their appeal. The U.S. Court of Appeals for the Eleventh Circuit affirms.

ATCA provides federal jurisdiction for a limited class of international wrongs, e.g. where an alien sues for a tort committed against him or her in violation of the law of nations. In such cases, it provides a U.S. forum for aliens to enforce their international rights. The primary actors in international law matters, however, are sovereign states. In this case, there is no state action and no indication that Deceased’s murder, however wrongful and tragic, did violate the law of nations.

“The [Plaintiffs’] … legal theory is that a killing by private actors in the course of an armed conflict is enough to give rise to subject matter jurisdiction under the ATCA, at least under the facts of this case. … [W]hile they concede that there is no state action, they argue nevertheless that the murder of [Deceased] by the PA and the PLO is sufficiently egregious to constitute an international war crime, thus conferring jurisdiction under ATCA. The Defendants maintain, however, that even a private killing in the course of an armed conflict cannot support subject matter jurisdiction under ATCA. In dismissing, the district court squarely rejected Plaintiffs’ theory. …”

“The first problem that the [Plaintiffs] face in this appeal is that the pleadings and the record do not evince any support for the theory that this single killing took place during the course of an international armed conflict. There is virtually nothing in the Third Amended Complaint (TAC) that pleads the existence of [such] an ongoing armed conflict. … The TAC does not explain whether the conflict was a war, how long it had gone on, who was fighting, what they were fighting for, how the conflict had evolved, or how the tort at issue fit into the larger picture.”

“Quite simply, the TAC fails to establish subject matter jurisdiction under the ATCA. … While the [Plaintiffs] suggest that we may look to facts extrinsic to the complaint to support subject matter jurisdiction …, the problem here is that the record is completely barren of any facts in support of the [Plaintiffs’] second legal theory.” [Slip op. 15‑17]

“As reprehensible as Katzir’s actions were, the result is a single act of murder. The Supreme Court has stated that any proposed cause of action under ATCA must be compared to the three torts contemplated in ATCA as originally passed: [1] offenses against ambassadors, [2] violations of safe conduct, and [3] piracy. Violations of these narrow sets of international norms threaten serious consequences in international affairs. See Sosa v. Alvarez‑Machain, 542 U.S. 692, 715, 725 (2004).”

“The Court is not aware of any case that suggests that a single murder committed by private actors in the course of an armed conflict gives rise to subject matter jurisdiction under ATCA. Otherwise [U.S.] courts would be open to [litigate] effectively every incident of violence in every unstable part of the world.”

The Court also warns of the adverse political consequences if it were to find subject matter jurisdiction. “Were we to assert subject matter jurisdiction in this case and on this barren record, the ‘collateral consequences,’ … could well be great. The issue of international terrorism ‘concerns an area of international law in which… the disagreements concern politically sensitive issues that are especially prominent in the foreign relations problems of the Middle East.’ …”

“Moreover, this case implicates the struggle between Israelis and Palestinians, an issue of U.S. foreign policy that presents numerous diplomatic and political challenges for the White House today, just as it has in years past. … A federal court weighing in on claimed Palestinian war crimes could add to the complexity, and could potentially undermine American objectives in the region. …”

“We do not point out these collateral concerns to say that the federal courts should simply decline to hear cases involving politically sensitive matters of international law. … In fact, there can be little doubt that ATCA permits federal courts to assert jurisdiction over hot‑button matters of international law. …”

“Rather, we raise these issues, at the direction of the Supreme Court, to underscore the real‑world consequences that can accompany federal judicial participation in matters of international concern. In an ATCA case such as this one, these foreign policy concerns weigh in the balance, and provide further support for our holding that, on this factual record, the district court lacked subject matter jurisdiction to hear this case.” [Slip op. 30‑31].

INTERNATIONAL CHILD ABDUCTION

Despite Pennsylvania state court order granting sole custody of ten‑year‑old daughter to father in U.S., Third Circuit affirms district court order that father must return child to mother in Netherlands since mother still had custody rights under Dutch law because father failed to seek enforcement of Pennsylvania Court Order in Netherlands court and instead chose to “snatch [child] and run.” Court also discusses sua sponte whether mother’s own “unclean hands” should affect her right to return of child

In 2001, EL, the female child of Paul Leendertz (PL) and his wife Marina Karpenko (MK), entered the world in Pennsylvania. The parents separated in the following year, however, and later divorced. In 2002, the Pennsylvania Court of Common Pleas issued an order that incorporated a Custody Stipulation by EL’s parents. It granted MK primary physical custody and provided that EL should live with MK in the Ukraine, MK’s native country. MK and EL later relocated to the Netherlands where EL began attending public school. Dutch soon became EL’s primary language and she was fully integrating into life in the Netherlands.

Meanwhile, the relationship between the parents continued to worsen. MK kept preventing PL from seeing his child, and both parties filed petitions for sole custody in 2008. While MK filed hers in the Dutch Court in Arnhem, PL filed his in the Pennsylvania Court of Common Pleas. The Dutch Court stayed MK’s petition while the Pennsylvania case was pending. In 2009, the Pennsylvania court granted PL the sole custody of EL. Despite his success, PL failed to understand or to comply with the requirement of Dutch law that, to be effective in the Netherlands, PL has to “domesticate” his foreign court order through a Dutch court. See Dutch Civil Code, Title 9, Article 985.

Instead, PL found EL outside her school in the Netherlands, and took her to the U.S. without notifying either MK or the appropriate Dutch court. Some days later, the Dutch court issued an order (1) that, at the time of EL’s removal, the parents had joint custody, (2) that PL had unlawfully removed EL, and (3) that PL must immediately return the child to Holland. PL, however, paid not the slightest attention to the Dutch court order.

Next, MK petitioned the U.S. District Court for the Eastern District of Pennsylvania to order PL to return EL to Holland. She relied upon the Hague Convention on the Civil Aspects of International Child Abduction (October 25, 1980, T.I.A.S. No. 11670, 1343 U.N.T.S. 89; reprinted in 51 Fed. Reg. 10,494 (1986); in effect for U.S. July 1, 1988) [HCCA]. The U.S. has also codified the HCCA in the International Child Abduction Remedies Act, 42 U.S.C. 11601 (ICARA), substantially absorbing the provisions of the HCCA into domestic U.S. law.

The District Court next held an evidentiary hearing. It determined (1) that EL’s habitual residence was in the Netherlands; (2) that both parents had custody rights under Dutch law at the time of PL’s unlawful removal; and (3) that PL had breached MK’s custody rights under Dutch law with his “snatch and run” tactics. Instead, he should have registered the Pennsylvania Court’s Order in the appropriate Netherlands court as Dutch law requires.

The District Court granted MK’s petition, but at the same time stayed its enforcement pending PL’s appeal. In a divided opinion, the U.S. Court of Appeals for the Third Circuit affirms the District Court’s Order that granted MK’s petition based on the HCCA. The Court also lifts the stay so that EL can return to the Netherlands.

On appeal, PL argued that his conduct did comply with U.S. and Dutch law. He relied on the Pennsylvania court’s order granting him sole custody of EL. The Third Circuit disagrees. Such an order does not authorize “a ‘snatch and grab,’ as accurately characterized by the District Court. A Pennsylvania state court lacks jurisdiction to authorize such conduct; therefore, the Pennsylvania court’s … Order was a nullity in the Netherlands until domesticated by a Dutch court. … [A] Dutch court ruled that PL had acted unlawfully by removing the child without MK’s permission. These facts support the District Court’s finding that PL had breached MK’s custody rights.” [Slip op. 9].

The appellate court then turns sua sponte to whether the mother’s “unclean hands” should stand in the way of EL’s return to Holland. “At oral argument, a member of this panel posed a novel question which was not raised or briefed by the parties or considered by the District Court.”

“The doctrine of unclean hands, ¼‘is a self‑imposed ordinance that closes the doors of a court of equity to one tainted with inequitableness or bad faith relative to the matter in which he seeks relief, however improper may have been the behavior of the [opponent].’… The doctrine may be raised sua sponte, … ; the question then is whether its application is appropriate here.”

“MK’s conduct in the Netherlands was decidedly not commendable; it was wrong for her to interfere with PL’s visitation rights and to refuse to disclose the child’s new address after relocating. But we are not aware of any authority that would support dismissal of a HCCA petition on grounds of unclean hands. … The language of the [HCCA], and of [ICARA] which implements it, demonstrates that their purpose is to protect the well‑being of children. The HCCA’s preamble emphasizes that ‘the interests of children are of paramount importance in matters relating to their custody’ and expresses a desire to protect children from the harms caused by wrongful removal.”

“The conduct of the parents, other than the claim of abduction or retention, is not mentioned in the [HCCA] except to the extent that this conduct may be relevant to one of the affirmative defenses. Moreover, Article 19 of the [HCCA] provides that a decision to return a child under the Convention is not a determination on the merits of custody. Custody is to be decided by a court of the child’s ‘habitual residence.’ The purpose of the [HCCA] is to safeguard the child by discouraging kidnapping in connection with custody disputes.”

INTERNATIONAL CHOICE OF LAW

In dispute over oral contract between Argentine and U.S. companies, Third Circuit applies U. N. Convention on International Sale of Goods (CISG) and holds that where one signatory country permits oral contracts while other signatory country does not, forum court must first decide, based on forum state’s choice‑of‑law rules, which nation’s law applies, and then apply law of that nation

Forestal Guarani S.A. (Plaintiff) manufactures lumber products in Argentina. In 1999, Daros International, Inc. (Defendant), based in New Jersey, bought wooden finger‑joints from Plaintiff based on an oral agreement. Plaintiff delivered products worth about $1.8 million, of which Defendant paid roughly $1.4 million. In 2002, Plaintiff sued for the balance in New Jersey state court, and Defendant removed the matter to federal court. In its answer, Defendant denied any further liability.

In 2005, Defendant moved for summary judgment based on the absence of a written agreement. The U. N. Convention on Contracts for the International Sale of Goods (CISG) [1489 U.N.T.S. 3; Sen. Treaty Doc. No. 98‑9 (1983), 19 I.L.M. 671 (1980), reprinted at 15 U.S.C. App. (1998); in force for all signatories January 1, 1988], purportedly requires such an agreement to be in writing. The District Court initially denied the motion. The Court later determined that CISG did govern the dispute and thus barred Plaintiff’s claim because the agreement was not in writing.

Plaintiff appealed. In a 2 to 1 vote, however, the U.S. Court of Appeals for the Third Circuit concludes that it cannot decide on the existing record whether to apply New Jersey or Argentine law.

The sticking point here is that the CISG does contain a limited provision allowing oral contracts. It permits signatory states, however, to opt out of this provision ‑‑ and some others. Argentina did in fact opt out, thus declining to enforce oral contracts. The U.S., however, did not opt out, thus is willing to enforce otherwise valid oral contracts.

In the appellate court’s view, where one party to the CISG is able to enforce otherwise valid oral contracts while the opposing party is not, a U.S. court has first to decide, based on the forum state’s choice‑of‑law analysis, which forum’s law it should apply. The Court therefore remands for further proceedings.

“The CISG ‘applies to contracts of sale between parties whose places of business are in different [sovereign] States … when the States are Contracting States[.]’ [[15 U.S.C. App., Art. 1(1)(a) ...]] The United States ratified the CISG on December 11, 1986, Argentina ratified it on July 19, 1983. It first became effective for all signatories as of January 1, 1988. …”

“Because both the United States, where [Defendant] is based, and Argentina, where [Plaintiff] is based, are signatories to the CISG and the alleged contract at issue involves the sale of goods, we agree with the parties that the CISG governs [Plaintiff’s] claim. … To resolve the parties’ dispute, we turn to the text of the CISG itself, …, giving effect to its plain language ‘absent extraordinarily strong contrary evidence,’ …”

“The CISG [explicitly] strives to promote certainty among contracting parties and simplicity in judicial understanding [1] by reducing forum shopping, [2] by reducing the need to resort to rules of private international law, and [3] by establishing a law of sales appropriate for international transactions.’ … Article 7 directs a court, in interpreting the CISG, to be mindful of ‘its international character and… the need to promote uniformity in its application and the observance of good faith in international trade.’”

“¼ [A]s relevant here, the CISG dispenses with certain formalities associated with proving the existence of a contract. Specifically, Article 11 instructs that ‘[a] contract of sale need not be concluded in, or evidenced by, writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.’ Similarly, Article 29 permits a contract modification to be proved even if it is not in writing. And Part II of the CISG, titled ‘Formation of the Contract,’ outlines requirements governing offer and acceptance but does not impose a writing requirement.”

“Article 11’s elimination of formal writing requirements does not apply in all instances in which the CISG governs. Article 96 of the CISG carves out an exception to Article 11, Article 29 and Part II. It says that: ‘[a] Contracting State whose legislation requires contracts of sale to be concluded in, or evidenced by, writing may at any time make a declaration in accordance with article 12 that any provision of article 11, article 29, or Part II of this Convention, that allows a contract of sale or its modification or termination by agreement or any offer, acceptance, or other indication of intention to be made in any form other than in writing, does not apply where any party has his place of business in that State.’ ”

“Article 12, ¼ states that:‘[a]ny provision of article 11, article 29 or Part II of this Convention that allows a contract of sale … to be made in any form other than in writing does not apply where any party has his place of business in a Contracting State which has made a declaration under article 96 of this Convention. The parties may not derogate from or vary the effect of this article.’ Id., Art. 12.”

FOREIGN SOVEREIGN IMMUNITY

In lawsuit to regain possession of Pissarro painting allegedly confiscated by Nazi agents and eventually acquired by Spanish government foundation, Ninth Circuit, sitting en banc, finds that FSIA expropriation exception applies, and that Spanish state‑owned Foundation conducted sufficient commercial activities in U.S.

Claude Cassirer (Plaintiff) claims that in 1939 an agent of the Nazi regime in Germany unlawfully seized a painting by French impressionist painter Camille Pissaro (1830‑93) from his grandmother Lilly Cassirer. The painting at issue is “Rue Saint‑Honore, Apres‑midi, Effet de la pluie.” Lilly allegedly sold the painting for only about $360 to a Nazi government appraiser out of fear that otherwise she might not be able to leave Germany.

Decades later, after the painting had been sold several times to different parties, art collector Baron Hans‑Heinrich Thyssen‑Bornemisza bought it. The Museum of the Thyssen‑Bornemisza Collection Foundation, an instrumentality of the Spanish government (Foundation) is displaying it now in Madrid. The Foundation claims it has good title to the painting.

In 2005, Plaintiff sued in a California federal court to reclaim the painting. Spain and the Foundation moved to dismiss based on sovereign immunity. See the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. 1602ff. The District Court denied the motion, and an appeal ensued. A majority of the U.S. Court of Appeals for the Ninth Circuit, sitting en banc, had remanded in 2009 after finding, as a matter of first impression, that the expropriation exception did apply in this case.

At that time, the Court, however, instructed the District Court to conduct a prudential exhaustion analysis. See 2009 International Law Update 112. Plaintiff based his claim on the expropriation exception to sovereign immunity. Spain and the Foundation disagree. They argue [1] that they were not the ones who had expropriated the painting, [2] that Plaintiff should have first exhausted any remedies available in Germany, and [3] that the U.S. Court lacked personal jurisdiction over it.

A 9 to 2 majority of the U.S. Court of Appeals for the Ninth Circuit, in an en banc opinion, concludes that the case does fall within the “expropriation” exception, 28 U.S.C. 1605(a)(3), and that the district court, therefore, did have subject matter jurisdiction to hear the case. The Foundation is not immune, even though it was not the original expropriator of the painting. Moreover, it has engaged in various activities within the U.S., such as enticing U.S. visitors to pay admissions to the museum; these amount to commercial activities for purposes of Section 1605(a)(3). Finally, the Court notes that, in cases such as this, exhaustion of remedies is not a prerequisite to federal judicial jurisdiction.

The Court first considers whether it has appellate jurisdiction. “It is well settled that sovereign immunity is within this small category of cases from which an immediate appeal will lie. … The point of immunity is to protect a foreign state that is entitled to it from being subjected to the jurisdiction of courts in this country, protection which would be meaningless were the foreign state forced to wait until the action is resolved on the merits to vindicate its right not to be in court at all. Thus, we have jurisdiction to review the district court’s order denying sovereign immunity.”

“The same is not true [1] of the court’s orders denying motions to dismiss for lack of a case or controversy and [2] [the ruling on] personal jurisdiction. … Van Cauwenberghe v. Biard, 486 U.S. 517, 526‑27 (1988), and Batzel v. Smith, 333 F.3d 1018, 1023 (9th Cir. 2003), both recognize that denial of a motion to dismiss for lack of personal jurisdiction is neither a final decision nor appealable under the “collateral order” doctrine.

“The FSIA presents a novel situation, however, in that personal jurisdiction over a foreign state exists under the statute if it is not immune and if proper service has been made. 28 U.S.C. § 1330(b) … Because the one follows from the other, the rulings arguably are so related that we should consider extending our collateral order jurisdiction over sovereign immunity to resolve personal jurisdiction as well. … We see no reason to do so here, however, for the decision points are different.”

“The Foundation argues that exercising personal jurisdiction offends due process. To resolve this argument, we would need to decide [1] whether a foreign state or an instrumentality of a foreign state is a ‘person’ for purposes of the Due Process Clause, [2] whether the FSIA incorporates the requirements of ‘minimum contacts,’ and [3] whether the Foundation has sufficient minimum contacts with the United States to support general or specific jurisdiction.

“[Defendant’s] stance on sovereign immunity, on the other hand, turns on whether the takings exception applies only to a foreign state that has itself taken property in violation of international law, and whether the Foundation has engaged in a commercial activity in the United States. In short, a decision that a foreign state is not entitled to sovereign immunity under the FSIA is not ‘inextricably intertwined’ with a decision that the exercise of personal jurisdiction comports with due process. … Therefore, we decline to expand our collateral order jurisdiction to append review of the latter to the former.”

“Although we have not previously addressed whether denial of a motion to dismiss for lack of a case or controversy is an immediately appealable collateral order, other circuits have indicated that questions of standing, case or controversy, and ripeness are, like the question of personal jurisdiction, not immediately appealable. … We routinely consider these issues on appeal from a final judgment, … and are not persuaded that the district court’s order refusing to dismiss this action for lack of a case or controversy should be immediately appealable.”

“While a favorable ruling would remove Spain from the lawsuit just as immunity would do, so too would prevailing on a myriad of other pretrial motions. Achieving an effectively similar result is no reason to bring denial of such motions within the ‘small category’ of decisions that merit immediate review, otherwise the category would be small no longer. Accordingly, we have no appellate jurisdiction to review the district court’s denial of motions to dismiss for lack of personal jurisdiction and [the absence of] a case or controversy.” [Slip op. 8‑10]

The Court then defines the justiciable issue in this appeal. “… [Plaintiff] invokes only the ‘expropriation’ exception in § 1605(a)(3). [It] provides that a foreign state is not immune in any case ‘in which rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state; or that property or any property exchanged for such property is owned or operated by an agency or instrumentality of the foreign state and that agency or instrumentality is engaged in a commercial activity in the United States[.]’”

“So far as the first condition is concerned, a taking offends international law [1] when it does not serve a public purpose, [2] when it discriminates against those who are not nationals of the country, or [3] when it is not accomplished with payment of just compensation. … ‘At the jurisdictional stage, we need not decide whether the taking actually [did violate] international law; as long as a ‘claim is substantial and nonfrivolous, it provides a sufficient basis for the exercise of our jurisdiction.’’ … On appeal, neither Spain nor the Foundation contends that [Nazi] Germany’s actions with respect to the painting were not a taking in violation of international law.”

“So far as the commercial activity prong is concerned, just the second clause is pertinent here as there is no dispute [that] the painting is not ‘present in the United States.’ Thus, there is jurisdiction under § 1605(a)(3) if the Foundation—which admittedly owns the painting and concedes it is an instrumentality of Spain for purposes of the statute—‘is engaged in a commercial activity in the United States.’ ‘A ‘commercial activity’ means either a regular course of commercial conduct or a particular commercial transaction or act. The commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose.’ 28 U.S.C. § 1603(d).”

“With this by way of background, we turn to the questions that are dispositive here: [1] whether § 1605(a)(3) covers a claim against Spain and the Foundation when neither was the foreign state that took the painting in violation of international law; [2] whether the Foundation is engaged in a sufficient commercial activity in the United States; and [3] whether exhaustion of remedies is required as a prerequisite to jurisdiction.” [Slip op. 11‑13]

Spain and the Foundation mainly contend that they were not the wrongdoers but only later purchasers, and that the FSIA expropriation exception only applies to the foreign state that expropriated the property at issue. The Court agrees with the District Court’s interpretation that the FSIA does not require that the foreign state against whom the claim is made also be the expropriating entity. Section 1605(a)(3) simply excepts from immunity “a foreign state” in any case “in which rights in property taken in violation of international law are in issue.” The Court thus accepts the plain meaning of the FSIA section. Congress meant for jurisdiction to exist over claims against a foreign state or its instrumentality for expropriated property, as long as the entity engages in commercial activity in the U.S.

Next, the Foundation argues that its commercial activities in the U.S. are de minimis, and lack the requisite connection to the property at issue. “It is clear that activity need not be motivated by profit to be commercial for purposes of the FSIA. … As § 1603(d) provides, the commercial character of an activity depends on its nature rather than its purpose. Thus, it does not matter that the Foundation’s [U.S.] activities are undertaken on behalf of a non‑profit museum to further its cultural mission. … The important thing is that the actions are ‘the type of actions by which a private party engages in trade and traffic or commerce.’ Republic of Argentina v. Weltover, Inc., 504 U.S. 607, 614 (1992) …”

“After allowing jurisdictional discovery on the issue, the district court found that the Foundation engages in commercial activities in the United States that include: buying books, posters, and post cards; purchasing books about Nazi expropriation of works of art; selling posters and books, and licensing reproductions of images; paying United States citizens to write for exhibit catalogs; shipping gift shop items to purchasers in the United States, including a poster of the Pissarro painting; recruiting writers and speakers to provide services at the museum; permitting a program to be filmed at the museum that included the Pissarro painting and was shown on Iberia Airlines flights between Spain and the United States; [and many other commercial activities]. ¼ These findings are supported in the record and are not clearly erroneous.”

“The Foundation faults the district court for having failed to require a nexus between the activity and the lawsuit, as well as a quantum of activity that has a substantial connection with the United States. It suggests that Congress meant to meld traditional concepts of personal jurisdiction with subject matter jurisdiction under the FSIA.”

“The second clause of § 1605(a)(3), however, contains no requirement that a lawsuit arise out of specific activity having to do with the property in the United States, that is, there is no express analogue to the traditional doctrine of specific jurisdiction; nor does it explicitly require any particular level of activity or conduct commensurate to that normally contemplated for general jurisdiction. ¼ Beyond this, the statute says nothing particularly helpful about what constitutes ‘a’ commercial activity that is either a ‘regular course of commercial conduct’ or a ‘particular commercial transaction or act.’ Instead, Congress left it to the courts to flesh out on a case‑by‑case basis. Here, the Foundation had many contacts with the United States that constitute commercial activity for jurisdictional purposes under the second prong of § 1605(a)(3).” [Slip op. 20‑24]

Finally, Spain argues that Plaintiff failed to exhaust judicial remedies in Germany or Spain before suing under the FSIA expropriation exception. Again, the Court disagrees. “[W]e rely on the plain language of § 1605(a)(3) which contains no exhaustion requirement. This was the district court’s primary conclusion, and it is one with which we agree.”

“‘Where Congress specifically mandates, exhaustion is required. But where Congress has not clearly required exhaustion, sound judicial discretion governs.’ … The expropriation exception says nothing at all about exhaustion of remedies. it does not, for example, condition immunity on a claimant’s having first presented his claim to the courts of the country being sued, or to the courts of the country that did the taking, or to any international tribunal. Spain identifies no language in the FSIA that would obligate [Plaintiff] to exhaust. It follows that exhaustion is not a statutory prerequisite to jurisdiction. …”

“This brings us to Sarei v. Rio Tinto, PLC, 550 F.3d 822 (9th Cir. 2008) (en banc), which was rendered after the district court’s decision in this case and in which we discussed whether prudential exhaustion should apply to claims under the Alien Tort Claims Act (ATCA) … There, residents of Papua New Guinea alleged various crimes against humanity and environmental torts arising out of Rio Tinto’s mining operations in Papua New Guinea. Recognizing that the Supreme Court had signaled in Sosa v. Alvarez‑Machain, 542 U.S. 692, 733 n.21 (2004), that a prudential or judicially‑imposed exhaustion requirement ‘would certainly’ be considered in an appropriate case under the ATCA, we held that Sarei was such a case.”

HUMAN RIGHTS

In litigation brought by mother of British soldier who died from hyperthermia while stationed in Iraq, U.K. Supreme Court upholds jurisdiction of lower court to consider liability of government under special circumstances of this case

Respondent’s son had died of hyperthermia while serving as a member of the British army in Iraq. She brought proceedings seeking an order quashing a coroner’s inquisition into his death. Her chief point was that that the inquest improperly failed to satisfy the procedural requirements of art. 2 of the 1950 European Convention for the Protection of Human Rights and Fundamental Freedoms (312 U.N.T.S. 221; E.T.S. 5) (ECHR).

The U.K. secretary of state (Petitioner) conceded that the Respondent was entitled to such an inquest.  Nevertheless, the Court felt required to explore and determine the jurisdiction and inquest issues as matters of general importance. The Petitioner argued that jurisdiction under ECHR art.1 was primarily territorial. Thus, soldiers only fall within the jurisdiction of the U.K. courts when a viable claim arose while they were within territory under the effective control of the U.K. Art. 2 criteria applied to the death of Respondent’s son only because it had taken place at his base.

On the other hand, Respondent submitted that her son was subject to the jurisdiction of the U.K. as a matter of domestic and international law based on his status as a member of the U.K. armed forces. She argued that soldiers were in the same legal position as other state agents such as diplomats and consular agents. Thus, when exercising state powers outside state territory of the state, soldiers remain subject to the jurisdiction of the state. In relation to the inquest issue, Respondent contended that the government must hold an Art. 2 investigation whenever a member of the armed forces dies on active service overseas.

The Petitioner sought review of the ruling by the Court of Appeal ([2009] EWCA Civ 441, [2009] 3 W.L.R. 1099) that a British soldier on military service abroad was subject to the jurisdiction of the U.K. within the meaning of Art. 1 of the 1950 ECHR so as to benefit from the rights guaranteed by the U.K. Human Rights Act 1998.

Thus the inquest into the death of the Respondent’s son ought to have satisfied the requirements of Art. 2 of the ECHR. It provides that “[e]veryone’s right to life shall be protected by law. No one shall be deprived of his life intentionally save in the execution of a sentence of a court following his conviction of a crime for which this penalty is provided by law.”

In a six to three vote, however, the U.K. Supreme Court allowed the Appeal in part (Lady Hale, Lord Mance and Lord Kerr dissenting on the jurisdiction issue). Unless they were on a U.K. military base at the time of a compensable happening, the courts have usually held that British troops on active service overseas did not to lie within the jurisdiction of the U.K. for the purposes of ECHR Art.1 and the Human Rights Act 1998. Bankovic v Belgium (Admissibility) (52207/99) 11 B.H.R.C. 435 held that jurisdiction under Art.1 was essentially territorial in nature. It extended only in exceptional circumstances requiring special justification to other bases of jurisdiction, such as when a state had taken effective control of part of foreign territory.

The instant case did not fall within any of the exceptions that the ECHR at Strasbourg has thus far recognized. As a result, the English courts should not read Art.1 as reaching any further than the existing ECHR jurisprudence showed it to reach, Bankovic and R. (on the application of Al‑Skeini) v. Secretary of State for Defence, [2007] UKHL 26, [2008] 1 A.C. 153 applies.

There was no basis in principle—or in the ECHR’s case law—that the limited jurisdiction which states have over their armed forces abroad both in national law and international law meant that they were within their jurisdiction for Art.1 purposes. Respondent’s proposed analogy between diplomatic and consular officials and members of the armed forces is not compelling.

The English courts should not rest Jurisdiction simply on the basis that the U.K. armed forces abroad were under the “authority and control” of the U.K, or that there was a “jurisdictional link” between the U.K. and those armed forces.

Nor were there policy grounds for extending the scope of the ECHR broadly to our armed forces abroad. The categories of exceptional circumstances contemplated in Bankovic depended upon the exercise by State A abroad of state power and authority over individuals—particularly nationals of State A—by the consent, invitation or acquiescence of the foreign State B.

In Iraq, the U.K. was the only power exercising and having under international law authority over its soldiers. In so far as there was any civil administration in Iraq, it consented to this. In such circumstances, where the U.K. was an occupying power recognized as such under international law, there was an irresistible case for treating its jurisdiction over its armed forces as extending to soldiers serving in Iraq for the purposes of Art.1. To distinguish fundamentally between the existence of protective duties on the part of the U.K. to its soldiers at home and abroad appears as unrealistic under the ECHR as it was at common law.

Moreover, the death of a serviceman on active service, assuming it did take place within the Art.1 jurisdiction of a state, did not automatically give rise to an obligation to hold an Art. 2 investigation. Soldiers are regularly exposed to the risk of death or injury as part of their job. The death of a soldier in combat did not raise a prima facie case for saying that the U.K. Army authorities had failed in their obligation to protect him and that there had, in consequence, been a breach of his Art. 2 rights.

Nevertheless, the secretary of state had been correct to concede that an Art. 2 investigation was necessary in the case of the heat‑related death of Respondent’s son. It was at least possible that there had been a failure in the health system that should have been in place to protect its soldiers from the risk posed by the extreme Iraqi temperatures. As a result, it was arguable that there may have been a breach of the state’s substantive obligations under Art. 2. We reverse the judgment below in part.