#11176 - Choice Of Forum And Jurisdiction - International Law II

Choice of Forum and Jurisdiction

1. Forum Selection Clauses

   1. Forum selection clauses generally deemed per se illegal until the 1950s

   2. 2^nd Circuit broke the trend in the 1950s

   3. The Bremen (Supr. Ct. 1972): landmark case announcing the modern view that forum selection clauses are:

      1. Prima facie valid & enforceable…

      2. … Unless the resisting party shows the clause to be “unreasonable”

   4. The Bremen

      1. Forum selection clause to be upheld UNLESS:

         1. Defect in the formation or validity of the clause (duress, fraud, undue influence…)

         2. Clause is unreasonable or unfair, OR

         3. The enforcement would contravene a strong public policy of the forum

      2. The Bremen is an admiralty case and its reach remains disputed to date.

         1. Most fed circuit courts of appeal have extended the reasoning to diversity and other non-admiralty cases

         2. A few US jurisdictions still treat forum selection clauses as per se unenforceable

         3. Some courts treat the clause as one element in their forum non conveniens analysis

         4. Some courts enforce the clause as a contract

   5. Hague Convention on Choice of Court Agreements

      1. Concluded on June 30, 2005; not in force

         1. US & EU signed; Mexico ratified (need one more ratification)

      2. Application:

         1. International contract with a choice of forum clause

         2. Designated court has jurisdiction unless the agreement is null and void under the law of the forum

         3. Adopts the severability theory

         4. the forum selection clause might be found valid and enforceable even though the underlying contract might later be found to be invalid

         5. All other courts must dismiss the case but exceptions apply (contractual-type defenses, public policy, other exceptional reasons)

      3. The Basic Rules:

         1. The Convention sets out Three Basic Rules:

            1. (1) The court chosen by the parties in an exclusive choice of court agreement has jurisdiction;

            2. (2) If an exclusive choice of court agreement exists, a court not chosen by the parties does not have jurisdiction, and must decline to hear the case; and

            3. (3) A judgment resulting from jurisdiction exercised in accordance with an exclusive choice of court agreement must be recognized and enforced in the courts of other Contracting States (other countries that are parties to the Convention).

   6. Anatomy of a Forum Selection Clause

      1. What does the clause cover?

         1. Exclusive v. non-exclusive

         2. Covers disputes “arising out of” the agreement v. “related to” the agreement

      2. Who does it cover?

         1. Parties to the underlying agreement

         2. Third parties? Ie., third party beneficiaries, corporate affiliates, etc.

2. Personal Jurisdiction

   1. Presence in the forum

      1. Residence, domicile, place of business

      2. Doing business or other contacts with the forum

         1. Int’l Shoe v. Wash., 326 US 310 (1945).

   2. (State) Long arm statute + due process

   3. Service of process (tag jurisdiction)

   4. Property in the jurisdiction (in rem/quasi in rem)

Don’t forget: Foreign sovereigns: immunity issues

5. Personal Jurisdiction (Based On Contacts)

   1. 2 broad types of contacts-based jurisdiction:

      1. General Jurisdiction: the claim is unrelated to the types of contacts

         1. need “continuous and systematic” contacts with the forum (state)

      2. Specific Jurisdiction: the claim is related to the basis for jurisdiction

         1. Domestic Defendant:

            1. Hanson v. Denckla: “purposeful availment”

               1. Intl Shoe & Pennoyer: minimum contacts such as not to offend traditional notions of fair play and substantial justice

         2. Foreign Defendant:

            1. “purposeful availment” +

            2. would not offend traditional notions of fair play and substantial justice:

               1. (1) the burden on defendant;

               2. (2) the interests of the forum state;

               3. (3) the plaintiff’s interest in obtaining relief;

               4. (4) the interstate judicial system’s interest in obtaining the most efficient resolution of the controversies; and

               5. (5) the shared interest of the several States in furthering fundamental substantive social policies. See Asahi.

               6. ALSO (6) the unique burden placed upon one ho must defend oneself in a foreign legal system;

               7. (7) the potential implications for United States foreign policy; and

               8. (8) the distance that the defendant would be forced to travel to defend itself. See Asahi.

   2. Different tests and standards apply to each.

   3. Courts are not always explicit in determining which type of jurisdiction they are dealing with!

3. Personal Jurisdiction and Due Process

   1. Intl Shoe & Pennoyer: minimum contacts such as not to offend traditional notions of fair play and substantial justice

   2. Hanson v. Denckla: “purposeful availment”

   3. Asahi Metal: reasonableness? Stream of commerce?

   4. For general jurisdiction: need “continuous and systematic” contacts with the forum (state)

      1. Goodyear Dunlop Ties Operations SA v. Brown (Supr. Ct. June 2011)

4. Service of Process

   1. Rule 4 (d) waiver

   2. Rule 4 (e) deals with domestic service

   3. Rule 4 (f) was added to deal specifically with service abroad:

      1. “Internationally agreed means reasonably calculated to give notice”

         1. E.g., Hague Convention on Service Abroad

      2. If no international agreement, then:

         1. Service as prescribed by the law of the foreign country

         2. As directed by the foreign country in response to letter rogatory

         3. Unless prohibited by the foreign country:

            1. personal delivery

            2. Service by mail

      3. Other means not prohibited by int’l agreement and as directed by the (US) court

   4. Hague Convention on Service Abroad

      1. The US has signed and ratified in 1967; Central Authority is the DoJ

      2. Convention entered into force in 1969

      3. Scope:

         1. Civil or commercial matters, and

         2. any proceeding where service is required

      4. Several avenues for service

5. Forum Non Conveniens

   1. Gulf Oil v. Gilbert, 330 U. S. 501 (1947): balance the private interests of the litigants and the factors of public interest

   2. 28 U.S.C. § 1404(a) (1948): FNC domestically is essentially displaced by change of venue procedures

      1. BUT: FNC is alive and well when dealing with cross-border cases!

   3. Gilbert FACTORS

      1. Private interest factors:

         1. (1) Relative ease of access to proof

         2. (2) Availability of compulsory process for attendance of unwilling witnesses

         3. (3) Cost of attendance of willing witnesses

         4. (4) Access to evidence

         5. (5) Other practical problems

         6. (6) Enforceability of the judgment

      2. Public interest factors:

         1. (1) Burden on the court docket

         2. (2) Burden of jury duty if there is no relation between the community and the litigation

         3. (3) Local interest in having localized controversies decided at home

      3. Balancing the factors: “unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.”

   4. State Variations on Forum Non Conveniens

      1. Some states have their own standards for FNC:

         1. Eg. Texas

      2. Some states decline to exercise FNC dismissal:

         1. Eg. Louisiana (civil law influence)

      3. NY:

         1. No FNC dismissal if proper forum selection in favor of NY

         2. In other cases: balancing test; unavailability of an alternate forum not an impediment to FNC dismissal

6. Hague Evidence Convention on the Taking of Evidence Abroad in Civil or Commercial...