Second Circuit Denies Rehearing En Banc in Fuld v. PLO

Thurgood Marshall U.S. Courthouse by Heather Paul (CC BY-ND 2.0 DEED)

Last week, the Second Circuit denied rehearing en banc in Fuld v. Palestinian Liberation Organization, an important personal jurisdiction decision that TLB has previously covered here, here, and here. The denial prompted a dissent by Judge Steven Menashi, joined in whole or in part by three other judges, which in turn prompted a concurrence by Judge Joseph Bianco, a member of the original panel. The case implicates several pressing debates over personal jurisdiction, including how far consent-based jurisdiction can extend and whether there’s a difference between the Due Process Clauses of the Fifth and the Fourteenth Amendments when it comes to personal jurisdiction. Ultimately, regardless of what the “right” outcome of the case might be, the dissent raises thoughtful arguments that the concurrence does not fully answer. This post outlines those disagreements and makes a few observations of my own.


The facts and procedural posture of the two consolidated cases are summarized here. In a decision last summer, a Second Circuit panel held unconstitutional the Promoting Security and Justice for Victims of Terrorism Act of 2019 (“PSJVTA”). The PSJVTA purports to establish personal jurisdiction over the Palestine Liberation Organization (“PLO”) and the Palestinian Authority (“PA”) for civil actions under the Anti-Terrorism Act (“ATA”). Specifically, 18 USC § 2334(e) provides that, “for purposes of any civil action” under the ATA, the PLO and PA “shall be deemed to have consented to personal jurisdiction” if they either (1) make a direct or indirect payment to an individual who committed an act of terrorism that killed or injured a U.S. national, or to their family, or (2) maintain an office or conduct any activity while physically present within the United States, other than activity necessary to participate in the United Nations (or for other narrowly specified purposes).

The panel held that the PSJVTA violated the PLO’s and PA’s due process rights because it converted voluntary conduct into implied consent by legislative fiat. Unlike the business registration statute that the Supreme Court upheld in Mallory v. Norfolk Southern Railway Co. (2023), the PSJVTA does not link consent to jurisdiction to a reciprocal benefit (such as permission to engage in business within the sovereign’s jurisdiction). Indeed, the panel stressed, the conduct that implies consent to jurisdiction under the PSJVTA is otherwise illegal under U.S. law.

Dissent from Denial of Rehearing En Banc

The plaintiffs petitioned for rehearing en banc, but the Second Circuit declined to reconsider the case. Judge Bianco—the only active Second Circuit judge on the original panel—wrote separately to defend the panel’s opinion. (Judge Pierre Leval, who as a senior judge could not participate in the vote on rehearing, exercised his prerogative to file a statement “wholeheartedly endors[ing]” Judge Bianco’s concurrence. Judge John Koetl, the Southern District of New York judge who authored the panel decision, had no role in considering this petition.)

Judge Menashi would have voted to grant rehearing en banc and wrote separately to explain his views. He disagreed with the panel’s reasoning on three separate grounds, any one of which would be sufficient to uphold the constitutionality of the PSJVTA, at least as applied to this case. He argued that (1) under the existing Fourteenth Amendment standards for personal jurisdiction, the PJSVTA was constitutional because a legislature can link consent to “knowing and voluntary conduct with a nexus to the forum” even without a reciprocal benefit; (2) even if the panel were correct that a reciprocal benefit is required, there was such a benefit here; and (3) none of this matters anyway because the Due Process Clause of the Fifth Amendment does not impose the same limits on the federal courts that the Fourteenth Amendment does for state courts. Judge Richard Sullivan agreed as to the first point, while Chief Judge Debra Livingston and Judge Michael Park agreed on all three.

The Limits of Consent-By-Statute

The first point confronts the uncertainty created by Mallory as to just how far consent-by-statute can extend. The danger, as Judge Bianco’s concurrence points out, is permitting everything and anything to constitute “consent.” The panel’s decision drew a line requiring the provision of a reciprocal benefit, like permission to do business within the state, as a way to ensure that the defendant in fact made a knowing and voluntary choice to accept jurisdiction. The dissent would instead draw a looser line, permitting any “knowing and voluntary conduct with a nexus to the forum” to constitute consent.

The panel supported its “reciprocal benefit” line by invoking caselaw regarding waiver of other constitutionally protected rights (like Eleventh Amendment sovereign immunity and Sixth Amendment jury trial rights). I agree with the dissent that these other constitutional contexts are just not analogous to the question of personal jurisdiction under the Due Process Clause. The dissent may also be correct that the requirement of reciprocal bargains for statutory consent is too strict.

On the other hand, Judge Bianco is correct that the dissent’s alternative formulation conflates knowing conduct with knowing consent. It is also not clear whether the dissent’s required “nexus to the forum” refers to the underlying dispute (here, the terrorist attacks overseas that killed U.S. citizens) or to the conduct that constitutes consent (here, martyr payments or activity conducted out of the defendant’s New York office). If the former, then consent-by-statute is simply backfilling specific jurisdiction, replacing what Bristol-Myers Squibb v. Superior Court (2017) (and maybe even Hanson v. Denckla (1958)) took off the table. If the latter, then the first basis for consent under the PSJVTA—martyr payments—may not survive constitutional scrutiny even under the dissent’s test.

The bottom line is that neither the panel nor the dissent has identified a satisfying way to limit the Pandora’s box opened by Mallory. But more fundamentally, the concurrence and dissent appear to disagree on what the foundation of personal jurisdiction is: Is it a social compact arrangement, where those who benefit from operating in a society also agree to be bound by its rules? Or is it a manifestation of the territorial power of the sovereign, which can control everything that happens within its own borders? The debate is reminiscent of the dueling opinions authored by Justice Antonin Scalia and Justice William Brennan in Burnham v. Superior Court of California (1990)—a case that figures in both the Judge Bianco’s and Judge Menashi’s opinions here.

What Constitutes a “Reciprocal Benefit”

The dissent’s second point challenges the application of the panel’s “reciprocal benefits” test to the specifics of this statute. The panel put great weight on the illegality of the conduct that the PSJVTA identifies as consent to jurisdiction. “So long as the PLO and the PA are prohibited from conducting business in the United States other than as allowed by the UN Headquarters Agreement,” Judge Bianco explained in his concurrence, “to establish deemed consent to jurisdiction based on those activities is to use the denial of a due process right as a penalty for unlawful conduct.”

Judge Menashi was not convinced. As he put it, “[t]he fact that the PLO and the PA extracted a benefit from the United States in violation of the law—and additionally benefited from the federal government’s nonenforcement of the law—does not alter the fact that those organizations received the benefit from the forum that the statute envisions.” The result of the panel’s logic, he worried, was that those who act illegally will be provided greater constitutional protection than those who obey the law. Further, he reasoned, the executive’s prosecutorial restraint in not enforcing these laws is itself a form of benefit.

I think the dissent has the better argument here. For one thing, Judge Bianco’s concern that broad understandings of consent could lead to civil litigation being leveraged “as a penalty for unlawful conduct” sits uncomfortably with our general acceptance of private enforcement regimes. But I can also see the logic, if one starts from the premise that consent must be based on a reciprocal benefit, that the state cannot rely on a benefit it is not actually willing to confer. The answer to that concern, however, might be that “reciprocal benefit,” in the private law contractual sense, is too strict a limit on statutory consent.

The Fifth Amendment and Originalist Approaches to Personal Jurisdiction

The dissent’s third point joins a (still relatively small) chorus of federal judges who are open to a radical originalist reconceptualization of personal jurisdiction. These judges have focused on the possible difference between the Fifth and Fourteenth Amendments. Even accepting the personal jurisdiction jurisprudence based on the Fourteenth Amendment, which limits the power of state courts, the Supreme Court has never directly addressed whether the Due Process Clause of the Fifth Amendment imposes identical limits on federal courts. And because the Fifth Amendment was adopted nearly a century before the Fourteenth Amendment, the original understanding of the Due Process Clause in each amendment could well differ.

This is the weakest part of the dissent, though the part in which I sense Judge Menashi is most invested. Granted, I start with great skepticism about any broad claims as to what procedural doctrines “used” to be (or, to use the dissent’s language, what “[t]he history demonstrates” about prior procedural understandings). But the dissent’s analysis does nothing to assuage that skepticism. Here are a few examples of arguments in this portion of the dissent that I found insufficiently supported:

First, the dissent posits an original understanding that Congress could override any limits on personal jurisdiction derived from general or international law. That argument, however, mixes together limits on prescriptive and adjudicative jurisdiction. For example, the dissent supports this proposition by collecting several early Supreme Court cases in a footnote, but those cases all pertain to Congress’s power to define the applicable law, not Congress’s power to determine who could be made to answer to that law in U.S. courts. The dissent also puts great weight on early courts’ deference to congressional legislation regarding the reach of service of process. But today, too, legislative authorization for the exercise of personal jurisdiction is a necessary requirement for adjudicative authority, separate from constitutional limits. That the early Supreme Court said Congress would have to authorize adjudicative authority does not by itself establish a lack of some other limitation on just how far Congress could go. (And pointing to the Charming Betsy doctrine does not help as, again, that line of cases addressed limits to Congress’s regulatory reach, not the reach of the federal courts).

Second, the dissent is adamant that “[a]fter the Fifth Amendment was ratified, federal courts continued to follow general law principles according to which tag jurisdiction allowed anyone served with process in the forum to be subject to personal jurisdiction there.” I understand that this is the position taken by the Burnham plurality, but I think the history is more complicated than that—as Justice Brennan noted in his Burnham concurrence. The early Supreme Court case cited here discusses the distinction between local and transitory actions, which relates more to the subject-matter jurisdiction of the federal courts than to power over defendants. I worry that judges interested in the original understanding of limits on adjudicative authority are too quick to assume that adjudicative authority looked in the early Republic exactly like it did to Justice Stephen Field in Pennoyer v. Neff (1878).

Third, the dissent argues that the concerns for federalism and individual liberty interests in the Fourteenth Amendment context are simply inapplicable when it comes to personal jurisdiction under the Fifth Amendment. I can see the federalism point, but there might be an analogous role in the Fifth Amendment context for international comity. (Indeed, international comity could be described as a progenitor of horizontal federalism.) Both international comity and horizontal federalism are constructs for managing jurisdictional conflict when multiple sovereigns have a legitimate claim to governance. The need for some outer limits to protect systemic balance still exists on the international scale.

That the Fifth Amendment’s Due Process Clause is unconcerned about individual liberty interests, at least when it comes to personal jurisdiction, is much harder for me to see. The dissent’s reasoning on this point begins with the premise that Congress has a power to legislate extraterritorially that U.S. states lack. As Judge Menashi put it, “A foreign entity is not similarly situated to the United States as a Wyoming resident is to Florida because the foreign entity is on notice that foreign conduct affecting the United States may subject it to American law.” I have a hard time understanding this premise because U.S. states can and do legislate extraterritorially, across both state and international borders, although their power to do so may be limited by the Dormant Commerce Clause. A Wyoming resident should also be on notice that some conduct outside the state of Florida could nonetheless subject them to the laws of Florida.

The logic connecting this premise to a lack of individual liberty interests also gives me pause. “The authority of Congress to assert legislative power extraterritorially,” Judge Menashi explained, “means that the federal courts must have a corresponding power to adjudicate disputes concerning its laws.” Based on citations, I think the dissent has in mind the outer limits of Article III power. That is an intrinsic limit on judicial power, while this debate regards extrinsic limits. And there are a number of extrinsic limits on the federal courts’ power to apply federal law: Congress did not assign federal question jurisdiction to the lower federal courts for nearly a century after the Founding, and the Supreme Court has interpreted that grant of federal question jurisdiction more narrowly than it has Article III’s head of jurisdiction. The Roberts Court has developed an aggressive presumption against extraterritoriality in interpreting federal statutes that has operated to limit congressional efforts to reach foreign conduct. Prudential doctrines of abstention and forum non conveniens enable federal courts to decline to hear federal question cases. Perhaps the rejoinder is that these are all limits imposed by Congress and the courts, not the Constitution itself. But presumably the Due Process Clause would prevent the federal courts from enforcing federal laws without notice to the defendant and an opportunity to be heard or, in the absence of 28 U.S.C. § 1738, from rehearing cases involving federal statutes that have already been heard and resolved in state courts.

Fourth, and relatedly, I am troubled that the dissent would ground the difference between the Fifth and Fourteenth Amendment (for personal jurisdiction purposes) on the foreign relations powers of the federal government. Yes, this statute pertains to terrorism, and yes, the federal government does have the authority to punish support for terrorism through other means, including war, sanctions, and criminal law (as the dissent points out). But “foreign relations” should not be a magic word that sets all transnational litigation apart. The dissent’s reasoning regarding the lack of due process limits on the federal courts’ exercise of personal jurisdiction would apply equally to run-of-the-mill business disputes and tort claims that have nothing to do with high politics or diplomacy. The real difference between the Fifth and the Fourteenth Amendment for purposes of personal jurisdiction is that the Fifth Amendment sovereign is the nation as a whole: the defendant’s relationship with the forum is not limited by state borders but can be evaluated on a national scale.

The point is not that the dissent is necessarily wrong on any of these grounds or in its ultimate conclusion. It is that much more work needs to be done to establish definitively that the original understanding of the Fifth Amendment placed no limits on the power of federal courts to haul certain defendants before them. As Judge Bianco put it, “The dissent seeks to overturn our well-established law based on some scholarship” (a callback to Justice Elena Kagan’s “some geniuses”?), but so far that scholarship provides an insufficient basis for upsetting decades’ worth of precedent.

Heading to the Supreme Court?

Unfortunately, Judge Bianco’s call for caution in invoking “some scholars’” understanding of history and tradition to upend decades worth of precedent is not likely to give the Supreme Court pause, should it decide to hear this case. And there is a good chance it will: a circuit court has held a congressional statute unconstitutional, the case implicates some significant open questions regarding personal jurisdiction, and Judge Menashi’s dissent reads (at times explicitly) like a petition for certiorari. Granted, the Supreme Court recently ducked this Fifth Amendment Due Process question when like-minded judges on the Fifth Circuit similarly tried to tee it up. But Fuld comes with the added bonuses of a federal statute regarding terrorism and the statutory consent questions left open by Mallory. Several Justices are ready to reconsider personal jurisdiction doctrine in its entirety, and Fuld would give them a further opportunity to sideline International Shoe Co. v. Washington (1945), either by embracing a broad understanding of statutory consent or by starting afresh under the Fifth Amendment.