U.S. Court of Appeals for the Federal Circuit, Corcamore, LLC v. SFM LLC, Docket No. 2019-1526

Trademark

Cancellation of Trademark Registrations

15 U.S.C. § 1064

Lexmark Analytical Framework

 

False Advertising Provided in 15 U.S.C. § 1125(a)

 

Standing v. Statutory Cause of Action

 

 

Appeal from the United States Patent and Trademark Office, Trademark Trial and Appeal Board in No. 92060308.

 

(…) We conclude that appellee SFM was entitled to bring and maintain a petition under 15 U.S.C. § 1064, the statutory cause of action for cancellation of trademark registrations, and that the Board did not otherwise abuse its discretion in imposing default judgment as a sanction. We affirm.

 

SFM filed a petition with the United States Patent and Trademark Office’s Trademark Trial and Appeal Board (“TTAB” or “Board”) to cancel Corcamore’s registration for SPROUT. J.A. 98–104.

 

(…) Corcamore moved to dismiss SFM’s petition for lack of standing under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See J.A. 136–40. Corcamore argued that SFM lacked standing to bring a petition for cancellation of a registered trademark, citing the analytical framework established by the Supreme Court in Lexmark International, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014), for determining whether the requirements for maintaining a statutory cause of action have been satisfied.

 

(…) We first address the standing issue.

 

In this appeal, we review de novo whether SFM pleaded sufficient facts to establish entitlement to challenge Corcamore’s registered trademark under § 1064.

 

We first observe that there exists confusion in the law stirred by the inconsistent use of the term “standing.” As Justice Scalia observed, certain issues often discussed in terms of “standing” are more appropriately viewed as requirements for establishing a statutory cause of action. Lexmark, 572 U.S. at 128 n.4. That is the case here. To be clear, this appeal does not involve the traditional legal notions of Article III standing. This appeal focuses instead on the requirements that a party must satisfy to bring or maintain a statutory cause of action, such as a petition to cancel a registered trademark under 15 U.S.C. § 1064.

 

We hold that the Lexmark analytical framework is the applicable standard for determining whether a person is eligible under § 1064 to bring a petition for the cancellation of a trademark registration. However, because we discern no meaningful, substantive difference between the analytical frameworks expressed in Lexmark and Empresa Cubana, we do not agree that the Board reached the wrong result in this case.

 

In Lexmark, the Supreme Court established two requirements for determining whether a party is entitled to bring or maintain a statutory cause of action: a party must demonstrate (i) an interest falling within the zone of interests protected by the statute and (ii) proximate causation. 572 U.S. at 129–34. The Court explained that those two requirements “supply the relevant limits on who may sue” under a statutory cause of action. Id. at 134. The Court made clear that the zone-of-interests requirement applies to all statutory causes of action, and that proximate causation generally applies to all statutory causes of action. Id. at 129, 133.

 

In Lexmark, the Court addressed the cause of action for false advertising provided in 15 U.S.C. § 1125(a). Id. at 129–37. The Court held that in order for a person to “come within a zone of interests in a suit for false advertising under § 1125(a), a plaintiff must allege an injury to a commercial interest in reputation or sales.” Id. at 131–32. The Court explained that the zone-of-interests test is “not especially demanding,” and that “the benefit of any doubt goes to the plaintiff.” Id. at 130.

 

(…) While our precedent does not describe the causation requirement as one of “proximate causation,” it nonetheless requires petitioner’s belief of damage to have “a sufficiently close connection,” Lexmark, 572 U.S. at 133, to the registered trademark at issue.

 

 

(U.S. Court of Appeals for the Federal Circuit, October 27, 2020, Corcamore, LLC v. SFM LLC, Docket No. 2019-1526)

California Court of Appeal, Prickett v. Bonnier Corp., Docket No. G058575

Admiralty Law

Admiralty Jurisdiction (Over a Tort Claim)

Scuba Diving Accident

Loss of Consortium

Loss of Society

 

Maintenance and Cure

Punitive Damages

State Territorial Waters

 

California Law

 

(…) Admiralty law has evolved since the days when it was entirely judge-made and mariners were practically wards of the court. Since the early 20th century, when Congress began legislating in this area, the role of the courts has changed from leader to follower, from promulgation to interpretation. As the United States Supreme Court has explained in its most recent opinion on the matter, the courts must now leave the development of novel claims and remedies to the legislatures. For that reason, we must affirm the judgment in this case.

 

Prickett, like her father a Hawaii resident, sued Bonnier in Orange County Superior Court for gross negligence, for “peculiar risk,” and “rescue doctrine” under general maritime law. She asked for compensatory damages for loss of her father’s society and also for punitive damages.

 

California state law does not permit recovery by a child for loss of consortium. (Southern California Gas Leak Cases (2019) 7 Cal.5th 391, 399.)

 

In actions founded on federal law, state law governs in procedural matters unless a federal statute provides otherwise. (Simmons v. Ware (2013) 213 Cal.App.4th 1035, 1047.)

 

The existence of admiralty jurisdiction over a tort claim depends on two factors: location and connection. “A court applying the location test must determine whether the tort occurred on navigable water or whether injury suffered on land was caused by a vessel on navigable water. [Citation.] The connection test raises two issues. A court, first, must ‘assess the general features of the type of incident involved,’ [citation], to determine whether the incident has ‘a potentially disruptive impact on maritime commerce.’ [Citation.] Second, a court must determine whether ‘the general character’ of the ‘activity giving rise to the incident’ shows a ‘substantial relationship to traditional maritime activity.’ [Citation.]” (Grubart, Inc. v. Great Lakes Dredge & Dock (1995) 513 U.S. 527, 534 (Grubart).) Admiralty jurisdiction is undisputed in this case, and we agree the circumstances – a scuba diving accident in the waters around French Polynesia – comply with the location and connection test as set forth in Grubart.

 

Dutra Grp. v. Batterton __ U.S. __ [139 S.Ct. 2275, 2279]:

The immediate issue in Dutra, as it was in the underlying Ninth Circuit’s Batterton decision, was the availability of punitive damages in unseaworthiness cases. (Dutra, supra, 139 S.Ct. at p. 2278.)

Dutra includes a comprehensive discussion of the evolution of maritime law – in both its common-law and statutory forms – since the early 19th century. According to the Supreme Court, admiralty law was exclusively judge-made until 1920, when Congress enacted the Merchant Marine Act of 1920, 46 U.S.C.S. Appen. § 688 et seq., better known as the Jones Act. The Court described the Jones Act as codifying the rights of injured mariners and creating new statutory claims that were freed from many of the common-law limitations on recovery. (Dutra, supra, 139 S.Ct. at p. 2281.) The Jones Act also provided injured mariners with the right to a jury trial. (Ibid.)

 

(…) Observing that neither the Death on the High Seas Act nor the Jones Act allowed loss of society damages, the Miles court had concluded, “The general maritime claim here alleged that decedent had been killed as a result of the unseaworthiness of the vessel. It would be inconsistent with our place in the constitutional scheme were we to sanction more expansive remedies in a judicially created cause of action in which liability is without fault than Congress has allowed in cases of death resulting from negligence. We must conclude that there is no recovery for loss of society in a general maritime action for the wrongful death of a Jones Act seaman.” (Miles, supra, 498 U.S. at pp. 32-33.) Atlantic Sounding held that punitive damages were recoverable in an action based on maintenance and cure. (Atlantic Sounding, supra, 557 U.S. at p. 407.) The Supreme Court reaffirmed both cases.

 

(Maintenance and cure, another early judge-made doctrine, required a ship’s master to provide food, lodging, and medical care to a seaman injured while serving aboard ship. This doctrine developed to prevent a ship’s owner or captain from dumping an injured seaman at the nearest port and leaving him to fend for himself. (Dutra, supra, 139 S.Ct. at pp. 2279, 2286.)

 

(…) Awards for punitive damages in maintenance and cure actions were a long-accepted remedy under general maritime law before the Jones Act. (Atlantic Sounding, supra, 557 U.S. at p. 424.) By contrast, there was no history of punitive damages awards in unseaworthiness claims, and so the court, constrained by Miles, declined to recognize “a new entitlement to punitive damages where none previously existed.” (Dutra, supra, 139 S.Ct. at pp. 2284, 2287.)

 

(…) In this case, during the hearing on the motion for judgment on the pleadings, Prickett’s counsel informed the court that his client “is not suing for unseaworthiness” and that her father “is not alleged to have been a seaman.” He also disclaimed any resort to the Jones Act. In her opening brief in this appeal, Prickett asserts that her case is not covered by the Jones Act or the Death on the High Seas Act, that the accident occurred on the high seas, and that her father was neither a seaman nor fatally injured. We accept those analyses.

 

((…) Chan v. Society Expeditions, Inc. (9th Cir. 1994) 39 F.3d 1398 (Chan). The Chan court recognized a different outcome for longshoremen and passengers injured or killed in state territorial waters, that is, within three miles of shore. (Chan, supra, 39 F.3d at p. 1407.)).

 

((…) The Death on the High Seas Act, 46 U.S.C.S. section 30302, provides, “When the death of an individual is caused by wrongful act, neglect, or default occurring on the high seas beyond 3 nautical miles from the shore of the United States, the personal representative of the decedent may bring a civil action in admiralty against the person or vessel responsible. The action shall be for the exclusive benefit of the decedent’s spouse, parent, child, or dependent relative.”).

 

Like the court in Chan, we conclude Miles precludes us from recognizing an entitlement to a remedy under general maritime law where none previously existed. Prickett has not cited any published case in which a child was allowed to sue for loss of society damages for a nonfatal injury to a non-seaman on the high seas. Both Miles and Dutra militate against us being the first to do so.

 

(California Court of Appeal, October 13, 2020, Prickett v. Bonnier Corp., Docket No. G058575, Certified for Publication)

Supreme Court of New Hampshire, Mentis Sciences, Inc. v. Pittsburgh Networks, LLC, Docket No. 2019-0548

 

Contract:

Lost Data

Consequential Damages v. Direct Damages

Limitation of Liability Clause

Limitation of Liability Clause Precludes the Plaintiff from Recovering Consequential Damages

Can A Limitation of Liability Clause Preclude Recovery of Any Damages Resulting from Any Breach?

Contract Drafting

New Hampshire Law

Negligence:

Economic Loss Doctrine

Negligence (Tort) Claim v. Contract Claim

 

The plaintiff, Mentis Sciences, Inc., appeals an order of the Superior Court (McNamara, J.) dismissing its claims for damages representing the cost of recreating lost data and lost business and negligence against the defendant, Pittsburgh Networks, LLC. The plaintiff argues that the trial court erred by: (1) concluding that the damages representing the cost of recreating lost data and lost business were consequential; (2) concluding that the limitation of liability clause in the parties’ contract is enforceable; and (3) dismissing its claim for negligence. We affirm because the damages sought by the plaintiff are consequential and the limitation of liability clause precludes the plaintiff from recovering consequential damages. We also conclude that the economic loss doctrine bars the plaintiff’s negligence claim.

 

In 2010, the defendant began providing the plaintiff with technological support or “IT” services. In 2014, the parties executed a “Service Agreement” in which the defendant agreed to provide the plaintiff with services including “monitoring of computers and network, data backup, network services, antivirus, and comprehensive maintenance and support for servers, PC’s and the network,” and the plaintiff agreed to pay the defendant an annual fee of $15,864. The parties’ contract included the following limitation of liability clause: “The Service Provider shall not be liable for any indirect, special, incidental, punitive or consequential damages, including but not limited to loss of data, business interruption, or loss of profits, arising out of the work performed . . . by the Service Provider.”

 

In August 2014, the defendant notified the plaintiff that a drive in one of its servers had failed and would need to be replaced. The defendant thereafter provided the plaintiff a summary of the problem: a “Redundant Array of Independent Disks” controller malfunctioned, causing the corruption of some of the plaintiff’s data. The defendant attempted to recover the corrupted data; however, the data was permanently lost because the defendant had failed to properly back it up.

 

According to the trial court, the plaintiff could only recover “what it expected to receive, the fair market value of the defendant’s services, which is probably close to . . . the contract price.” The trial court also concluded that the plaintiff’s negligence claim was precluded by the economic loss doctrine. Accordingly, the trial court dismissed the plaintiff’s damages claims for the cost of recreating the lost data and lost business and its negligence claim. Thereafter, in a ruling that is not the subject of this appeal, the trial court awarded the plaintiff $40,000 in direct damages. This appeal followed.

 

(…) A party’s expectation interest is comprised, in part, of “the loss in the value to him of the other party’s performance caused by its failure or deficiency,” in addition to “any other loss, including incidental or consequential loss, caused by the breach.” Restatement (Second) of Contracts, § 347(a)-(b), at 112. Thus, according to the principles we explain further below, a party’s expectation interest may be fulfilled by an award of both direct and consequential damages. See Joseph M. Perillo, Corbin on Contracts § 55.3, at 10 (rev. ed. 2005) (“Placing a party in the same economic position as performance would have sometimes requires a grant of general [or direct] damages coupled with consequential damages.”).

 

The line dividing what may be considered direct versus consequential damages “is not capable of exact determination.” Id. § 56.6, at 105. However, we find the following principles instrumental when divining the difference. Direct damages “are based on the value of the performance itself,” whereas consequential damages are based “on the value of some consequence that performance may produce.” Dan B. Dobbs & Caprice L. Roberts, Law of Remedies: Damages — Equity — Restitution § 12.4, at 811 (3d ed. 2018); see Restatement (Second) of Contracts, § 347(a)-(b), at 112; see also Schonfeld v. Hilliard, 218 F.3d 164, 176 (2d Cir. 2000) (describing consequential damages as those that “seek to compensate a plaintiff for additional losses (other than the value of the promised performance) that are incurred as a result of the defendant’s breach”). Thus, consequential damages “are not based on the capital or present value of the promised performance but upon benefits it can produce or losses that may be caused by its absence.” Dobbs & Roberts, supra § 12.2, at 804; see Restatement (Second) of Contracts, supra § 347 cmt. c at 114 (“Consequential losses include such items as injury to person or property resulting from defective performance.”); see also KC Properties v. Lowell Inv. Partners, 280 S.W.3d 1, 10 (Ark. 2008) (describing consequential damages as those that flow “from some of the consequences or results of the breach”).

 

Applying these principles to the plaintiff’s claim for damages representing the cost of recreating the data and lost business, we conclude that such damages are consequential. Pursuant to the parties’ contract, the defendant agreed to provide services to maintain and manage the plaintiff’s network infrastructure. Even if we assume, as the plaintiff asserts, that the defendant explicitly agreed to provide data protection or backup services, we would conclude that the damages the plaintiff seeks are consequential. The cost of recreating the lost data does not represent the value of the performance of maintaining and managing the plaintiff’s network or data. Rather, this cost represents an amount necessary to repair a loss that was caused by the absence of the performance of those services, and, accordingly, is consequential in nature.

 

Similarly, the business and profits that the plaintiff lost because it cannot use the data to bid on projects do not represent the value of the defendant’s performance. Lost profit damages may be direct or consequential, depending upon the circumstances. See Atlantech Inc. v. American Panel Corp., 743 F.3d 287, 293 (1st Cir. 2014) (discussing when lost profit damages may be considered direct or consequential); see also Kerr S.S. Co. v. Radio Corporation of America, 157 N.E. 140, 141 (N.Y. 1927) (“Damage which is general [or direct] in relation to a contract of one kind may be classified as special [or consequential] in relation to another.”). Here, the claimed lost profit damages are not direct because the profits lost were not inherent in the contract; that is, the plaintiff did not stand to earn these profits as a direct result of its contract with the defendant. See Penncro Associates, Inc. v. Sprint Spectrum, L.P., 499 F.3d 1151, 1156 (10th Cir. 2007) (explaining that one situation in which lost profit damages are considered direct is “if a services contract is breached and the plaintiff anticipated a profit under the contract”); see also Atlantech, 743 F.3d at 293 (providing as an example of lost profits that are direct damages “a general contractor suing for its remaining contract price less saved expenses”). Rather, what the plaintiff gained from the contract was the defendant’s services. The plaintiff’s profits were anticipated as a result of its bidding and participating in other “projects,” which relied upon actions and contingencies that would have taken place outside of its contract with the defendant. Accordingly, the lost profit damages the plaintiff seeks are consequential. See Atlantech, 743 F.3d at 293 (determining that the lost profit damages sought by the plaintiff were consequential because “they depend on contingencies beyond the terms of the contract itself”); Penncro, 499 F.3d at 1156 (explaining that lost profits damages are considered consequential if the breach precluded the plaintiff “from performing other work . . . from which it expected to make a profit”).

The cases relied upon by the plaintiff provide no support for its argument that the damages it seeks are direct rather than consequential.

 

Can a limitation of liability clause preclude recovery of any damages resulting from any breach?

(…) Orthopaedic Center of South Florida, P.A. v. Stryker Corporation, 08-60742-CIV-DIMITROULEAS, 2008 WL 11331981 (S.D. Fla. Sept. 16, 2008). There, the United States District Court for the Southern District of Florida, applying Florida law, concluded that a limitation of liability clause that precluded recovery of “direct, special, incidental or consequential damages resulting from any breach of warranty or condition, or under any other legal theory,” was unenforceable. The court reasoned that a reasonable person would not understand that the clause “contracts away any meaningful remedy” for a breach and enforcing the clause “would allow the Defendants to breach provisions of the contract through its own negligent behavior, with impunity, thereby rendering specific provisions of the contract meaningless.”

 

In sum, we conclude that the damages representing the cost of recreating the data and lost profits are consequential. Because we also conclude that the limitation of liability clause, which precludes recovery of consequential damages, is enforceable, the plaintiff is unable to recover those damages.

 

Negligence:

The economic loss doctrine is a “judicially-created remedies principle that operates generally to preclude contracting parties from pursuing tort recovery for purely economic or commercial losses associated with the contract relationship.” Plourde Sand & Gravel v. JGI Eastern, 154 N.H. 791, 794 (2007). The doctrine recognizes that contract and warranty law are better suited than tort law for “dealing with purely economic loss in the commercial arena.” Id. Allowing a contracting party to sue in tort “when a transaction does not work out as expected” in effect allows that party to “rewrite the agreement to obtain a benefit that was not part of the bargain.” Id. Accordingly, the doctrine “precludes a harmed contracting party from recovering in tort unless he is owed an independent duty of care outside the terms of the contract.” Wyle v. Lees, 162 N.H. 406, 410 (2011).

 

In Wyle, we determined that the economic loss doctrine did not bar the plaintiff’s negligent misrepresentation claim because the misrepresentations induced the plaintiff to enter into a contract. Id. at 411-12. The plaintiff argues that the defendant “negligently misrepresented to the plaintiff that it was routinely backing up the plaintiff’s data.” However, in Wyle we endorsed a distinction between negligent misrepresentation claims “that center upon an alleged inducement to enter into a contract from those that focus upon performance of the contract.” Id. at 411. When a negligence claim is “based merely upon the breach of a contractual duty,” the claim will not lie. Id. On the other hand, when “the misrepresentation of present fact serves as an inducement for the contract,” the negligence claim is not duplicative of the breach of contract claim. Id.

 

For the reasons stated above, we affirm the trial court’s dismissal of the plaintiff’s damages claims representing the cost of recreating its lost data and lost business and its negligence claim.

 

 

(Supreme Court of New Hampshire, September 22, 2020, Mentis Sciences, Inc. v. Pittsburgh Networks, LLC, Docket No. 2019-0548)

U.S. Court of Appeals for the Seventh Circuit, Servotronics, Inc. v. Rolls-Royce PLC and The Boeing Company, Docket No. 19-1847

Discovery

 

Evidence

Application to Obtain Discovery for Use in Foreign Proceedings

In Private Foreign Arbitrations?

Ex Parte Application

Letter Rogatory

Letter of Request

Subpoena

Motion to Quash

 

Circuit Split: Section 1782(a) of Title 28 does not authorize the district courts to compel discovery for use in private foreign arbitrations (Second, Fifth and Seventh Circuit).

 

 

Section 1782(a) of Title 28 authorizes the district court to order a person within the district to give testimony or produce documents “for use in a proceeding in a foreign or international tribunal.” This case asks whether a private foreign arbitration is “a proceeding in a foreign or international tribunal” within the meaning of the statute.

 

Two decades ago, the Second and Fifth Circuits answered this question “no,” holding that § 1782(a) authorizes the district court to provide discovery assistance only to state-sponsored foreign tribunals, not private foreign arbitrations. Nat’l Broad. Co. v. Bear Stearns & Co., 165 F.3d 184, 191 (2d Cir. 1999); Republic of Kazakhstan v. Biedermann Int’l, 168 F.3d 880, 883 (5th Cir. 1999).

 

More recently, the Sixth Circuit reached the opposite conclusion, Abdul Latif Jameel Transp. Co. v. FedEx Corp. (In re Application to Obtain Discovery for Use in Foreign Proceedings), 939 F.3d 710, 714 (6th Cir. 2019), and the Fourth Circuit agreed, Servotronics, Inc. v. Boeing Co., 954 F.3d 209, 214 (4th Cir. 2020). We join the Second and Fifth Circuits and hold that § 1782(a) does not authorize the district court to compel discovery for use in a private foreign arbitration.

 

(…) The parties agreed to conduct the arbitration in London.

 

Servotronics thereafter filed an ex parte application in the U.S. District Court for the Northern District of Illinois asking the court to issue a subpoena compelling Boeing to produce documents for use in the London arbitration. The application invoked 28 U.S.C. § 1782(a), and the judge initially granted it and issued the requested subpoena. Rolls-Royce intervened and moved to quash the subpoena, arguing that § 1782(a) does not permit a district court to order discovery for use in a private foreign commercial arbitration. Boeing intervened and joined the motion to quash. The judge reversed course and quashed the subpoena. She agreed with Rolls-Royce and Boeing that § 1782(a) does not authorize the court to provide discovery assistance in private foreign arbitrations. Servotronics appealed. Rolls-Royce and Boeing jointly defend the judge’s ruling.

 

Sections 1781 and 1782 of Title 28 govern the district court’s authority to provide discovery assistance in litigation in foreign and international tribunals. Section 1781 describes a formal judicial instrument known as a “letter rogatory”—a letter of request “issued by one court to a foreign court, requesting that the foreign court (1) take evidence from a specific person within the foreign jurisdiction ... and (2) return [it] ... for use in a pending case.” Letter of Request, BLACK’S LAW DICTIONARY (11th ed. 2019).

 

Letters rogatory are transmitted through diplomatic agencies; the statute provides that the State Department may, either “directly, or through suitable channels, ... receive a letter rogatory issued, or request made, by a foreign or international tribunal, to transmit it to the tribunal, officer, or agency in the United States to whom it is addressed,” and “receive and return it after execution.” 28 U.S.C. § 1781(a)(1). The assistance is reciprocal; tribunals in the United States may issue letters rogatory through the State Department to a “foreign or international tribunal, officer, or agency.” Id. § 1781(a)(2).

 

(…) The order may be made pursuant to a letter rogatory issued, or request made, by a foreign or international tribunal or upon the applica- tion of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court.

 

(…) For several reasons, we side with the Second and Fifth Circuits in this interpretive debate. First, the word “tribunal” is not defined in the statute, and dictionary definitions do not unambiguously resolve whether private arbitral panels are included in the specific sense in which the term is used here. (…) In short, canvassing dictionary definitions is inconclusive. In both common and legal parlance, the phrase “foreign or international tribunal” can be understood to mean only state-sponsored tribunals, but it also can be understood to include private arbitration panels. Both interpretations are plausible.

 

(…) Harmonizing this statutory language and reading it as a coherent whole suggests that a more limited reading of § 1782(a) is probably the correct one: a “foreign tribunal” in this context means a governmental, administrative, or quasi-governmental tribunal operating pursuant to the foreign country’s “practice and procedure.” Private foreign arbitrations, in other words, are not included.

 

(…) The discovery assistance authorized by § 1782(a) is notably broader than that authorized by the FAA. Most significantly, the FAA permits the arbitration panel—but not the parties—to summon witnesses before the panel to testify and produce documents and to petition the district court to enforce the summons. 9 U.S.C. § 7. Section 1782(a), in contrast, permits both foreign tribunals and litigants (as well as other “interested persons”) to obtain discovery orders from district courts. If § 1782(a) were construed to permit federal courts to provide discovery assistance in private foreign arbitrations, then litigants in foreign arbitrations would have access to much more expansive discovery than litigants in domestic arbitrations. It’s hard to conjure a rationale for giving parties to private foreign arbitrations such broad access to federal-court discovery assistance in the United States while precluding such discovery assistance for litigants in domestic arbitrations.

 

(…) For the foregoing reasons, we join the Second and Fifth Circuits in concluding that § 1782(a) does not authorize the district courts to compel discovery for use in private foreign arbitrations.

 

 

(U.S. Court of Appeals for the Seventh Circuit, September 22, 2020, Servotronics, Inc. v. Rolls-Royce PLC and The Boeing Company, Docket No. 19-1847)

Revision de la loi suisse sur les douanes - Rapport explicatif

 

Le Conseil fédéral ouvre la consultation relative à la révision de la loi sur les douanes

Berne, 11.09.2020 - Lors de sa séance du 11 septembre 2020, le Conseil fédéral a ouvert la consultation relative à la révision totale de la loi sur les douanes (LD) et à la création d'une loi définissant les tâches d'exécution du futur Office fédéral de la douane et de la sécurité des frontières (OFDF). La modernisation complète des bases légales est un élément majeur du programme de numérisation et de transformation DaziT, dont découlent le développement organisationnel de l'Administration fédérale des douanes (AFD) et sa transformation en OFDF.

 

https://www.admin.ch/gov/fr/accueil/documentation/communiques.msg-id-80383.html

 

Rapport explicatif

relatif à la loi fédérale fixant le cadre général de la perception des redevances et concernant le contrôle de la circulation transfrontalière des marchandises et des personnes par l'Office fédéral de la douane et de la sécurité des frontières (loi définissant les tâches d'exécution de l'OFDF, LE-OFDF)

ainsi qu’à la révision totale de la loi sur les douanes (LD) en vue de la nouvelle loi sur les droits de douane (LDD)

du 11 septembre 2020

https://www.newsd.admin.ch/newsd/message/attachments/62867.pdf

 

U.S. Court of Appeals for the Ninth Circuit, Global Commodities Trading Group, Inc. v. Beneficio De Arroz Choloma, S.A., a Honduran Company, Docket No. 18-16026

 

Jurisdiction

 

Personal Jurisdiction

 

Specific Jurisdiction Over Employees

 

Forum Non Conveniens

 

Import

 

Incoterms

 

CIF Contracts

 

California Law

 

 

The panel reversed the district court’s order dismissing for lack of personal jurisdiction, vacated its orders on the parties’ remaining motions, and remanded with instructions to deny the forum non conveniens motion in an action brought by Global Commodities Trading Group, Inc. (“Global”), a California corporation, against Beneficio De Arroz Choloma, S.A. (“Bachosa”), a Honduran corporation, and two of its officers to recover losses on contracts.

 

Global is a California corporation with its headquarters in Placer County, California. At the time of the events giving rise to this action, it was engaged in the business of international sales of agricultural commodities. Bachosa is a corporation organized under the laws of Honduras with its principal place of business in Choloma, Cortés, Honduras. It is engaged in the business of importing and processing rice and corn from countries including the United States. Bachosa has no offices, real property, or employees in California.

 

From 2008 through 2012, Bachosa purchased approximately 137,450 metric tons of agricultural commodities from Global for more than $50 million pursuant to hundreds of separately negotiated contracts. The contracts generally were cost, insurance, freight (“CIF”) contracts, meaning Global’s contractual performance was considered complete when the goods were loaded at the point of shipment. Global and Bachosa primarily negotiated their contracts by phone and email.

 

(…) Following the alleged January meeting in California, Global arranged for shipment under the contracts. The United States Department of Agriculture issued an inspection certificate for the rice and corn in Woodland, California. The goods were shipped from the United States from Port of Darrow, Louisiana to Puerto Cortes, Honduras on the MV UBC Sacramento on January 19, 2012.

 

(…) See, e.g., Boschetto v. Hansing, 539 F.3d 1011 (9th Cir. 2008) (holding that a single eBay sale to a California resident did not give rise to personal jurisdiction there).

 

Specific jurisdiction over Andonie and Jarufe presents a different question: when may a court exercise jurisdiction over individuals based on their contacts with a forum on behalf of a corporation?

 

We noted that the Supreme Court had allowed the exercise of specific jurisdiction over employees based on actions they took on behalf of a corporation. See, e.g., Calder v. Jones, 465 U.S. 783, 790 (1984) (“their status as employees does not somehow insulate them from jurisdiction”); Keeton, 465 U.S. at 781 n.13. As a matter of Arizona law, we held that the state’s long-arm statute allowed the exercise of personal jurisdiction to the limits of the federal Constitution, and therefore did not shield corporate officers from jurisdiction over their persons based on actions within the scope of their employment. Davis, 885 F.2d at 522.

 

California’s long-arm statute, like Arizona’s, imposes no limitations on personal jurisdiction beyond those required by due process. See Picot, 780 F.3d at 1211.

 

Although their status as officers of Bachosa does not foreclose personal jurisdiction over Andonie and Jarufe, their status also does not guarantee it. Personal jurisdiction over an individual who acts as an agent of a third party must be assessed on the individual’s actions alone.

 

(…) Our statement in Forsythe that “a corporate officer who has contact with a forum only with regard to the performance of his official duties is not subject to personal jurisdiction in that forum,” Forsythe, 576 F.2d at 783–84, is clearly irreconcilable with the Supreme Court’s decisions subjecting corporate employees to suit in exactly those circumstances. See Miller v. Gammie, 335 F.3d 889, 900 (9th Cir. 2003) (en banc); see also Davis, 885 F.2d at 521 (rejecting the fiduciary shield doctrine based on Calder and Keeton). However, our holding in Forsythe that a personal guaranty of a corporation’s debt may give rise to personal jurisdiction over a corporate officer remains good law.

 

We decide questions of forum non conveniens as a matter of federal law even in cases where state or foreign substantive law governs. Ravelo Monegro v. Rosa, 211 F.3d 509 (9th Cir. 2000). “To prevail on a motion to dismiss based upon forum non conveniens, a defendant bears the burden of demonstrating an adequate alternative forum, and that the balance of private and public interest factors favors dismissal.” Ranza, 793 F.3d at 1076 (quoting Carijano v. Occidental Petroleum Corp., 643 F.3d 1216, 1224 (9th Cir. 2011)). “Forum non conveniens is an exceptional tool to be employed sparingly . . . .” Ravelo Monegro, 211 F.3d at 514. To succeed, a defendant must make “a clear showing of facts which . . . establish such oppression and vexation of a defendant as to be out of proportion to plaintiff’s convenience.” Id. (alteration in original) (quoting Cheng v. Boeing Co., 708 F.2d 1406, 1410 (9th Cir. 1983)).

 

We hold that the balance of private and public interest factors does not favor dismissal. Both sides identify witnesses for whom appearance in their home country would be more convenient. Most of the key documentary evidence, although originally in Spanish, has already been translated into English. The defendants contend that evidence related to Honduran importation permits and the demurrage charges incurred by the Sacramento would be more easily accessible in Honduras. However, evidence related to the negotiations in California would be more easily accessible in California. That some witnesses would prefer to appear in Honduras falls well short of a clear showing of facts which establish such oppression and vexation of a defendant as to be out of proportion to plaintiff’s convenience. Ravelo Monegro, 211 F.3d at 514. Moreover, Global submitted evidence of significant safety concerns with travel to Honduras, particularly for those who travel to the country for the purpose of collecting debt owed by Honduran companies.

 

A plaintiff’s choice of forum—particularly a plaintiff’s “home forum”—is entitled to considerable deference. Ranza, 793 F.3d at 1076 (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 255 (1981)); see also Ravelo Monegro, 211 F.3d at 512 (noting that dismissal for forum non conveniens is typically only appropriate where a plaintiff chooses a forum wholly unrelated to the dispute). This case presents no more than the ordinary burdens any foreign defendant will bear when called to defend an action in the United States against a domestic plaintiff. Those burdens are insufficient to overcome the presumption in favor of Global’s choice of its home forum.

 

The panel held that the district court had specific personal jurisdiction over the corporate defendant.

 

 

(U.S. Court of Appeals for the Ninth Circuit, August 26, 2020, Global Commodities Trading Group, Inc. v. Beneficio De Arroz Choloma, S.A., a Honduran Company, Docket No. 18-16026, For Publication)