New Scholarship on Personal Jurisdiction and the FSIA

A short forthcoming article by Robert Dorhman examines the use of the test from Bancec (First National City Bank v. Banco Para El Comercio Exerior de Cuba) to resolve various questions that arise under the Foreign Sovereign Immunities Act (FSIA).  Dohrman quite right to point out that the Bancec test, which was originally developed to resolve the substantive liability of state-related enterprises, is ill-suited for many of the purposes for which it is commonly used today, especially in the context of personal jurisdiction.  And although I disagree with a premise of part of his argument – namely that foreign states lack due process rights – he is also right to point out that the use of Bancec to make personal jurisdiction determinations needs to be revisited following the Supreme Court’s decision in Fuld v. Palestine Liberation Organization.

The article, Sins of the Father: Veil-Piercing and Foreign Sovereign Immunity After Fuld is forthcoming in the Yale Law Journal Forum.

Here is the abstract:

For decades, the question of when to hold foreign sovereigns liable for the actions of their state-owned enterprises (SOEs), or vice versa, has been a source of intense litigation. Though the now well-established Bancec test clarified when plaintiffs may use veil piercing to hold a government liable on behalf of its SOEs, lower courts have also applied it to resolve challenges to both subject-matter and personal jurisdiction under the Foreign Sovereign Immunities Act and to adjudicate SOEs’ due process defenses in cases that do not involve veil piercing at all. This Essay argues that the Supreme Court’s recent decision in Fuld v. Palestine Liberation Organization—where it elaborated a flexible, context-specific view of the Fifth Amendment Due Process Clause’s requirements for federal jurisdiction—renders two of these extensions unjustifiable. By using the factors to resolve due process challenges to personal jurisdiction in non-veil-piercing FSIA cases, lower courts have layered a judicially created test on top of the statutory predicates Congress provided. The flexible “reasonableness” inquiry suggested by the Fuld Court similarly suggests that the Bancec factors’ use in traditional veil-piercing cases is inappropriate: Foreignsovereigns’ lack of due process rights makes such calibration entirely unnecessary. Of course, the Bancec test has its place. But its place is in the reverse veil-piercing context for which it was designed, where the test tracks the flexible reasonableness inquiry Fuld describes. By incorporating Fuld’s lessons in the two circumstances identified by this Essay, courts can better fulfill congressional intent and clarify the threshold burdens plaintiffs must meet when pursuing expensive, politically sensitive FSIA litigation.