Transnational Litigation at the Supreme Court, term October 2024

Today is the first day of the Supreme Court’s October term. This post briefly discusses four transnational cases in which the Court has already granted certification, as well as several other cases in the pipeline that could be decided this term. Readers can also see our Supreme Court page.

Cases where the court Cert. has granted

Republic of Hungary v Simon

In Republic of Hungary v Simonthe Supreme Court will consider three questions under the expropriation exception to the Foreign Sovereign Immunities Act (FSIA): (1) whether the historical commingling of assets is sufficient to establish that the proceeds of seized property have the requisite commercial nexus with the United States has; (2) whether a plaintiff must make a valid claim at the pleading stage that an exception to the FSIA applies, rather than merely making a plausible inference that an exception applies; and (3) whether a sovereign defendant bears the burden of presenting evidence disproving that the proceeds of expropriated property have a commercial nexus with the United States.

The plaintiffs inside Simon are Holocaust survivors who allege that Hungary expropriated their property, commingled the proceeds with other government funds, and ultimately used those funds to pay U.S. government bondholders. The D.C. Circuit held that commingling was sufficient to establish the requisite connection with the United States, that plaintiffs only had to make a plausible inference that the exception applied, and that the burden was on Hungary to prove that the funds the country used to pay off bondholders in the United States could not be traced to the proceeds of expropriated property.

The attorney general filed an amicus brief supporting Hungary and arguing that the DC Circuit’s decision should be reversed. I have expressed doubts about one aspect of the SG’s position.

CC/Devas (Mauritius) Limited v Antrix Corp.

The question inside CC/Devas (Mauritius) Limited v Antrix Corp. And Devas Multimedia Private Ltd. v. Antrix Corp. (consolidated for oral arguments) is whether the exercise of personal jurisdiction over a foreign state under the FSIA requires satisfaction of the minimum contacts test.

The FSIA provides at 28 USC § 1330(b) that personal jurisdiction “exists” over any claim over which a district court has jurisdiction, that is, claims for which a foreign state is not entitled to immunity. The FSIA defines a foreign state as a large number of state-owned enterprises. Lower courts have generally held that foreign states are not “persons” within the meaning of the Fifth Amendment Due Process Clause and are accordingly not protected by constitutional limits on personal jurisdiction, including the minimum contact requirement. However, private companies are entitled to due process protections, and lower courts have difficulty determining whether foreign state-owned companies should be characterized as foreign states (without due process protections) or as private companies (with such protections). In this case, the Ninth Circuit interpreted the FSIA itself as requiring minimal contact. Petitioners argue that neither the law nor the Constitution imposes such a requirement.

Ingrid (Wuerth) Brunk has argued that foreign states are due process “persons” and that Article III also requires federal courts to have personal jurisdiction over them. If the Supreme Court agrees, it may also have to consider whether the limits of personal jurisdiction applicable to federal courts under the Fifth Amendment are the same as those applicable to state courts under the Fourteenth Amendment, a question that has recently gained attention drawn from the lower courts. .

Smith & Wesson Brands v Estados Unidos Mexicanos

Smith & Wesson Brands v Estados Unidos Mexicanos It is not a case brought against a foreign state, but rather a case brought Through a foreign state. As regular readers will recall, Mexico sued Smith & Wesson and other gun manufacturers in federal district court for the District of Massachusetts, arguing that the defendants design, market, and sell weapons in ways that they know will harm Mexican drug cartels arm. The court ruled that Mexico’s claims were barred by the Protection of Lawful Commerce in Arms Act (PLCAA). But the First Circuit reversed, ruling that some of Mexico’s claims fit within the PLCAA’s “predicate” exception. On remand, the court dismissed the claims against all gun manufacturers, except Smith & Wesson, for lack of personal jurisdiction.

The questions posed have to do with the predicate exception, specifically whether Mexico has sufficiently alleged that the production and sale of weapons in the United States substantially caused Mexico’s injuries and constituted complicity in the firearms trade, in violation of federal law.

BLOM Bank SAL v Honickman

The plaintiffs inside BLOM Bank SAL v Honickman They are American citizens who have been victims (or family members of victims) of terrorist attacks by Hamas. They sued BLOM Bank for allegedly supporting and abetting the terrorist attacks by providing banking services to three customers allegedly affiliated with Hamas. Under the Anti-Terrorism Act (ATA), as amended by the Justice Against Sponsors of Terrorism Act (JASTA), liability extends to “any person who aids and abets, by knowingly providing substantial assistance, or who conspires with the person who committed such acts.” an act of international terrorism.”

After plaintiffs refused several times to amend their complaint, the court dismissed it with prejudice because they had failed to state a claim upon which relief could be granted. On appeal, the Second Circuit clarified the standards for contributory liability under the ATA but affirmed the dismissal of the complaint. Plaintiffs then asked the district court to vacate their judgment under Federal Rule 60(b)(6) and allow them to file an amended complaint under the clarified law. The district court denied the request and the Second Circuit reversed.

In Twitter, Inc. against Taamneh (2023), the Supreme Court has significantly tightened the rules for complicity under the ATA, but this case is not about those rules. Rather, the question posed is whether Section 60(b)(6)’s requirement that there be extraordinary circumstances to justify reopening a final judgment applies to a motion to vacate so that an amended complaint can are submitted.

Other things in the pipeline

Fuld v. Palestine Liberation Organization

The plaintiffs inside Fuld v. Palestine Liberation Organization have asked the Supreme Court to review the Second Circuit’s decision declaring the Promoting Security and Justice for Victims of Terrorism Act of 2019 (PSJVTA) unconstitutional. The Solicitor General has filed his own cert petition defending the constitutionality of the statute.

The PSJVTA claims to establish personal jurisdiction over the Palestine Liberation Organization (PLO) and the Palestinian Authority (PA) for civil actions under the ATA by providing in 18 USC § 2334(e) that the PLO and the PA “shall be deemed to have consented under personal jurisdiction” if they either (1) make payments to persons who have committed an act of terrorism that killed or injured U.S. citizens, or to their families, or (2) have an office or conduct any activity in the United States , other than activities necessary to participate in the United Nations. The Second Circuit held that the PSJVTA violated the due process rights of the PLO and the PA by transforming persistent conduct into implied consent through legislative fiat.

There is a good chance that the Supreme Court will grant a declaration simply because a lower court has declared an act of Congress unconstitutional. The case also tests the limits of the power to consent Mallory v. Norfolk Southern Railway Co. (2023) in a context where the dormant Commerce Clause does not apply because Congress acted in place of a state. Finally, the case provides an opportunity for the Court to consider whether the due process limits applicable to federal courts under the Fifth Amendment differ from the limits applicable to state courts under the Fourteenth Amendment, a question that ( as noted above) can also rise in CC/Devas.

Shell PLC v Honolulu

In Shell PLC v HonoluluShell is seeking review of a Hawaii Supreme Court ruling allowing climate change tort claims to be brought against Shell and other major oil companies. This is one of several climate change cases filed against oil companies by state and local governments in recent years. Shell argues that Hawaii’s tort law is being undermined by federal law because climate change is a global problem. In June, the Supreme Court called for the views of the Solicitor General.

Binance vs Anderson

In Binance vs AndersonA crypto asset exchange is asking the Supreme Court to review a Second Circuit decision allowing federal and state securities law claims against it to be prosecuted. I previously noted some problems with the Second Circuit’s decision, but the petition does not raise these issues.

Instead, Binance argues that the Second Circuit misapplied Morrison v National Australia Bank (2010), which held that § 10(b) applies only to securities transactions in the United States. This seems like an uphill battle. The Second Circuit applied the same test that it has routinely used to determine the location of transactions in unlisted securities, a test that other circuits have also applied. And while there is division over whether Morrison‘s transactional test is the exclusive limit on the extraterritorial reach of U.S. securities laws, the decision here does not imply that split.

Take action against Cisco Systems

We can also expect a final petition Do v. Cisco Systems, Inc. In that case, the Ninth Circuit ruled that Chinese practitioners of Falun Gong could bring claims under the Alien Tort Statute (ATS) against Cisco for aiding and abetting human rights abuses by establishing a surveillance system for the Chinese government. The complaint clearly fits within the limits the Supreme Court has placed on claims under the ATS because the defendant is a U.S. company that has engaged in substantial conduct in the United States.

However, Cisco can be expected to argue that aiding and abetting claims cannot be brought under the ATS. As I noted in a recent post, a Supreme Court decision to ban aiding and abetting claims would be a definitive and fatal blow to premises liability under the ATS.