Academic journal article Defense Counsel Journal

A Brief Overview of Recent Supreme Court Precedent - Keeping Foreign Litigation at Bay

Academic journal article Defense Counsel Journal

A Brief Overview of Recent Supreme Court Precedent - Keeping Foreign Litigation at Bay

Article excerpt

GLOBALIZATION marches on. Consistent with this, connections between the United States and the outside world (both perceived and actual) have become commonplace. (1) Of particular relevance to products liability practitioners, from the 1990s through present day, exports of goods and services as a percentage of United States gross domestic product have continued to increase, as has international trade in general. (2)

For the United States judiciary, this likely means more litigation that is international in nature. Along with that international flavor comes more claims between persons and entities of different national origins, as well as more choice-of-law, venue, and jurisdictional issues. Due to the civil jury system that it provides, its more generous damages laws, and the different compensation structures available to its legal counsel, the United States (and its constituent states and territories) will likely continue to be an attractive litigation situs for claims with greater connections to foreign countries. (3)

In light of this, for products practitioners, as well as defense counsel in other contexts, it is important to understand some of the more recent United States Supreme Court precedent addressing tools to keep foreign litigation at bay. Considered together, these decisions demonstrate the High Court's tendency to err on the side of keeping foreign-centered litigation outside of the United States court system.

Examples of such decisions include those addressing where the principal conduct at issue is centered for purposes of the Foreign Sovereign Immunities Act ("FSLA"); the presumption against extraterritorial application of United States statutory law; personal jurisdiction over foreign defendants; and the doctrine of forum non conveniens.

I. Recent Precedent Demonstrating The High Court's Tendency To Keep Foreign Litigation At Bay

A. OBB Personenverkehr AG v. Sachs and FSIA's Commercial-Activity Exception

In OBB Personenverkehr AG v. Sachs, a California resident sued the Austrian state-owned railway for injuries that she sustained while attempting to board a train in Innsbruck, Austria. (4) She predicated her suit on a United States-based travel agent's Internet sale of a Eurail pass to her before she left for her trip to Europe. (5) Such passes "are available only to non-Europeans, who may purchase them both directly from the Eurail Group and indirectly through a worldwide network of travel agents." (6)

The Austrian governmental defendant raised FSIA, 28 U.S.C. [section][section] 1330, 1332, 1391(0- 1441(d), and 1602-11, as a defensive bar. (7) In response, the plaintiff argued (successfully in Ninth Circuit Court of Appeals) that her case satisfied FSIA's commercial-activity exception. (8) The commercial-activity exception abrogates sovereign immunity for suits "based upon a commercial activity carried on in the United States by [a] foreign state." (9) The Sachs plaintiff contended that this exception allowed her suit to proceed in United States federal district court because her suit was "based upon" her Massachusetts travel agent's Internet-based sale of a Eurail pass in the United States, and the travel agent's sale was attributable to the Austrian state-owned railway through common-law principles of agency. (10) Under the plaintiffs and the Ninth Circuit's analysis, so long as at least one element of her claim was tied to the United States-based ticket sale, the commercial-activity exception applied and allowed her action to proceed here.

Without reaching the agency question, the United States Supreme Court unanimously rejected the plaintiff's position and reversed the Ninth Circuit. (12) Chief Justice Roberts' opinion for the Court reasoned that conduct comprising only "one element" of a plaintiffs cause of action is insufficient to satisfy the "based upon" requirement of the first clause of FSIA's commercial-activity exception. …

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