Choice of Law in the American Courts in 2022
February 14, 2023
Original Art by Leah Coyle
The thirty-sixth annual survey on choice of law in the American courts is now available on SSRN. The survey covers significant cases decided in 2022 on choice of law, party autonomy, extraterritoriality, international human rights, foreign sovereign immunity, foreign official immunity, the act of state doctrine, adjudicative jurisdiction, and the recognition and enforcement of foreign judgments. It is our valentine to all our readers who love choice of law as much as we do.
Choice of Law
Courts in Michigan and Ohio applied foreign law to determine the validity of marriages celebrated abroad, while the Rhode Island Supreme Court applied Rhode Island law to hold that an administratrix could draw on the assets of an estate to pay the costs of litigation challenging the will in Greece.
Federal courts addressed the extraterritorial application of several federal statutes. The Ninth Circuit weighed in on a circuit split involving the extraterritorial application of RICO’s private right of action. The Supreme Court subsequently granted cert, and argument is scheduled for April 25, 2023.
The Fourth Circuit, agreeing with other circuits, held that the federal wire-fraud statute applies to uses of wires in the United States even if the scheme to defraud is centered abroad. The Second Circuit addressed the geographic scope of the Commodities Exchange Act (CEA), applying its distinctive approach to the Securities Exchange Act and continuing a split with other circuits over whether Morrison’s transactional test is the exclusive test for determining the applicability of the Securities Exchange Act and the CEA. And the D.C. Circuit held that the principal whistleblower provision of the Sarbanes-Oxley Act does not apply to retaliation against employees abroad.
International Human Rights
The D.C. Circuit held that U.S. victims of terrorist attacks in Iraq and their families had adequately pleaded claims under the Anti-Terrorism Act against U.S. and foreign medical supply and manufacturing companies. The Ninth Circuit held that Cambodian plaintiffs who were trafficked to work in seafood processing plants in Thailand failed to state a claim under the Trafficking Victim Protection Reauthorization Act. And the Eleventh Circuit held that some of the plaintiffs bringing claims against Chiquita Brands International under the Torture Victim Protection Act had provided sufficient evidence to survive summary judgment.
Foreign Sovereign Immunities Act
The Supreme Court held that state rather than federal choice of law rules apply in cases brought against foreign states under the Foreign Sovereign Immunities Act (FSIA). For discussion at TLB, see here and here.
In cases brought under the FSIA’s expropriation exception, the D.C. Circuit held that the defendant Hungarian National Asset Management Inc. was an agency or instrumentality rather than part of state of Hungary and therefore was not immune from a suit seeking to recover art expropriated during the Holocaust. The Fourth Circuit, by contrast, held that the Netherlands’ Ministry of Education, Culture, and Science and its Cultural Heritage Agency were political subdivisions of the state itself.
Interpreting the FSIA’s commercial activity exception, the Fourth Circuit held that that South Korea’s contract to buy F-35 fighter planes and a military satellite did not involve a commercial activity. The Eleventh Circuit, on the other hand, held that France’s marine archeological project to recover historical shipwrecks was a commercial activity.
Foreign Official Immunity
In 2022, several courts dismissed suits against Saudi Crown Prince Mohammad bin Salman (MBS). In the most prominent of these, a federal district court dismissed claims arising from the murder of journalist Jamal Khashoggi on grounds of head of state immunity after MBS was appointed Prime Minister of Saudi Arabia. Two other courts dismissed claims against MBS for lack of personal jurisdiction, without reaching the question of foreign official immunity.
Act of State Doctrine
The Second Circuit held that the act of state doctrine does not bar U.S. antitrust claims based on the acts of a foreign government. Although the decision appears to correctly apply the Supreme Court’s decision in Kirkpatrick, it also creates a split with several other circuits over how the act of state doctrine works in antitrust cases.
Whether the same limits on personal jurisdiction that apply to state courts under the Fourteenth Amendment also apply to federal courts under the Fifth Amendment is a question that is indirectly before the Supreme Court this Term in Mallory v. Norfolk Southern Railway Co., a case TLB has been covering. The question is presented much more clearly in a pending cert petition seeking review of the Fifth Circuit’s en banc decision holding that the limits are in fact the same. This question has significant implications for litigation under the Anti-Terrorism Act, for which district courts have rejected Congress’s attempts to provide for personal jurisdiction by deeming payments made to families of terrorists consent to jurisdiction.
With respect to service of process, a California appellate court applied the California Supreme Court’s 2020 decision in Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology to hold that a contractual provision agreeing to service of process by mail was actually a waiver of service, making compliance with the Hague Service Convention unnecessary. As previously discussed at TLB, these decisions make little sense.
And both the Sixth and the Seventh Circuits dismissed bribery claims against U.S. corporations by an agency of the Mexican government under the doctrine of forum non conveniens. These decisions arguably gut a key provision of the U.N. Convention Against Corruption, which says that treaty parties must permit actions for damages suffered as the result of corruption.
Recognition and Enforcement of Foreign Judgments
In 2022, the Ninth Circuit held that enforcing a French copyright judgment was not contrary to U.S. public policy even though the French copyright law on which it was based did not contain a “fair use” exception. A New York appellate court reversed a trial court’s refusal to enforce a Chinese Judgment on the ground that China lacked impartial tribunals. And the Supreme Court of Virginia clarified the provision of the Uniform Foreign-Country Money Judgments Recognition Act providing that it applies only to a foreign judgment that “[g]rants or denies recovery of a sum of money.”
The annual survey on choice of law was admirably maintained by TLB advisor and contributor Symeon Symeonides for three decades. It is a service to the conflicts community that the authors of this year’s survey feel is worth continuing. We hope that TLB’s readers will find it useful as well.