U.S. Supreme Court, Abitron Austria GmbH v. Hetronic Int’l, Inc., Docket No. 21-1043, 600 U.S. 412

Extraterritoriality

 

Presumption Against Extraterritoriality

 

Conflict of Laws

 

Foreign Law

 

International Relations

 

Trademark Infringement

 

Circuit Split

 

 

 

 

This case requires us to decide the foreign reach of 15 U.S.C. §1114(1)(a) and §1125(a)(1), two provisions of the Lanham Act that prohibit trademark infringement. Applying the presumption against extraterritoriality, we hold that these provisions are not extraterritorial and that they extend only to claims where the claimed infringing use in commerce is domestic. 

 

§1114(1)(a) prohibits the unauthorized “use in commerce of any reproduction . . . of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services” when “such use is likely to cause confusion.” 

 

§1125(a)(1) prohibits the “use in commerce” of a protected mark, whether registered or not, that “is likely to cause confusion.”

 

We granted certiorari to resolve a Circuit split over the extraterritorial reach of the Lanham Act. 598 U.S. ––– (2023).

 

“It is a `longstanding principle of American law “that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” '” Morrison v. National Australia Bank Ltd., 561 U.S. 247, 255 (2010). We have repeatedly explained that this principle, which we call the presumption against extraterritoriality, refers to a “presumption against application to conduct in the territory of another sovereign.” Kiobel v. Royal Dutch Petroleum Co., 569 U.S. 108, 119 (2013) (citing Morrison, 561 U.S., at 265). In other words, exclusively “`foreign conduct is generally the domain of foreign law.'” Microsoft Corp. v. AT&T Corp., 550 U.S. 437, 455 (2007) (alteration omitted). The presumption “serves to avoid the international discord that can result when U.S. law is applied to conduct in foreign countries” and reflects the “`commonsense notion that Congress generally legislates with domestic concerns in mind.'” RJR Nabisco, Inc. v. European Community, 579 U.S. 325, 335–336 (2016).

 

Applying the presumption against extraterritoriality involves “a two-step framework.” Id., at 337. At step one, we determine whether a provision is extraterritorial, and that determination turns on whether “Congress has affirmatively and unmistakably instructed that” the provision at issue should “apply to foreign conduct.” Id., at 335, 337; accord, Kiobel, 569 U.S., at 117 (asking whether Congress “intends federal law to apply to conduct occurring abroad”); Nestlé USA, Inc. v. Doe, 593 U.S. –––, ––– (2021). If Congress has provided an unmistakable instruction that the provision is extraterritorial, then claims alleging exclusively foreign conduct may proceed, subject to “the limits Congress has (or has not) imposed on the statute's foreign application.” RJR Nabisco, 579 U.S., at 337–338.

 

If a provision is not extraterritorial, we move to step two, which resolves whether the suit seeks a (permissible) domestic or (impermissible) foreign application of the provision. To make that determination, courts must start by identifying the “` “focus” of congressional concern' ” underlying the provision at issue. Id., at 336. “The focus of a statute is `the object of its solicitude,' which can include the conduct it `seeks to “regulate,”' as well as the parties and interests it `seeks to “protect” ' or vindicate.” WesternGeco LLC v. ION Geophysical Corp., 585 U.S. –––, ––– (2018) (alterations omitted).

 

Step two does not end with identifying statutory focus. We have repeatedly and explicitly held that courts must “identify `the statute's “focus” ' and ask whether the conduct relevant to that focus occurred in United States territory.” Id., at ––– (emphasis added); accord, e.g., RJR Nabisco, 579 U.S., at 337. Thus, to prove that a claim involves a domestic application of a statute, “plaintiffs must establish that `the conduct relevant to the statute's focus occurred in the United States.'” Nestlé, 593 U.S., at ––– – ––– (emphasis added); see, e.g., WesternGeco, 585 U.S., at ––––––– (holding that a claim was a domestic application of the Patent Act because the infringing acts—the conduct relevant to the focus of the provisions at issue—were committed in the United States); Morrison, 561 U.S., at 266–267, 271–273 (concluding that a claim was a foreign application of the Securities and Exchange Act because the “purchase-and-sale transactions” at issue occurred outside of the United States).

 

Step two is designed to apply the presumption against extraterritoriality to claims that involve both domestic and foreign activity, separating the activity that matters from the activity that does not. After all, we have long recognized that the presumption would be meaningless if any domestic conduct could defeat it. See Morrison, 561 U.S., at 266. Thus, “`if the conduct relevant to the statute's focus occurred in the United States, then the case involves a permissible domestic application' of the statute, `even if other conduct occurred abroad.'” WesternGeco, 585 U.S., at ––– (quoting RJR Nabisco, 579 U.S., at 337). And “if the relevant conduct occurred in another country, `then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory.'” WesternGeco, 585 U.S., at ––– (quoting RJR Nabisco, 579 U.S., at 337). Of course, if all the conduct “`regarding the violations `took place outside the United States,'” then courts do “not need to determine . . . the statute's `focus'” at all. Id., at 337. In that circumstance, there would be no domestic conduct that could be relevant to any focus, so the focus test has no filtering role to play. See, e.g., Nestlé, 593 U.S., at –––; Kiobel, 569 U.S., at 124.

 

With this well-established framework in mind, the first question is whether the relevant provisions of the Lanham Act, see §§ 1114(1)(a), 1125(a)(1), provide “a clear, affirmative indication” that they apply extraterritorially, RJR Nabisco, 579 U.S., at 337. They do not.

 

(…) When applying the presumption, “`we have repeatedly held that even statutes . . . that expressly refer to “foreign commerce” '” when defining “commerce” are not extraterritorial. Morrison, 561 U.S., at 262–263; see also RJR Nabisco, 579 U.S., at 344.

 

See Kiobel, 569 U. S., at 118 (“It is well established that generic terms like `any' or `every' do not rebut the presumption against extraterritoriality”). And the mere fact that the Lanham Act contains a substantively similar definition that departs from the so-called “boilerplate” definitions used in other statutes cannot justify a different conclusion either.

 

In other words, Congress proscribed the use of a mark in commerce under certain conditions. This conduct, to be sure, must create a sufficient risk of confusion, but confusion is not a separate requirement; rather, it is simply a necessary characteristic of an offending use.5 Because Congress has premised liability on a specific action (a particular sort of use in commerce), that specific action would be the conduct relevant to any focus on offer today. See, e.g., WesternGeco, 585 U.S., at ––– – –––.

 

In sum, as this case comes to us, “use in commerce” is the conduct relevant to any potential focus of §1114(1)(a) and §1125(a)(1) because Congress deemed a violation of either provision to occur each time a mark is used in commerce in the way Congress described, with no need for any actual confusion. Under step two of our extraterritoriality standard, then, “use in commerce” provides the dividing line between foreign and domestic applications of these Lanham Act provisions. 

 

5 Both provisions “refer to a `likelihood' of harm, rather than a completed harm.” Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, 432 (2003). In other words, “actual confusion is not necessary in order to prove infringement.” Restatement (Third) of Unfair Competition §23, at 250, Comment b (1993); accord, id., §23, at 251, Comment d; 4 J. McCarthy, Trademarks and Unfair Competition § 23:12, at 23–157 (5th ed. 2023) (McCarthy) (“ `It is black letter law that actual confusion need not be shown to prevail under the Lanham Act, since . . . the Act requires only a likelihood of confusion' ”). Instead, the provisions treat confusion as a means to limit liability to only certain “bona fide use[s] of a mark in the ordinary course of trade.” 15 U. S. C. § 1127 (defining “use in commerce”); see Patent and Trademark Office v. Booking.com B. V., 591 U.S. –––, ––– (2020) (“A competitor's use does not infringe a mark [under §1114(1)(a) and § 1125(a)(1)] unless it is likely to confuse consumers”).

 

When a claim involves both domestic and foreign activity, the question is whether “`the conduct relevant to the statute's focus occurred in the United States.'” Nestlé, 593 U.S., at ––– – –––. If that “`conduct . . . occurred in the United States, then the case involves a permissible domestic application' of the statute `even if other conduct occurred abroad.’” WesternGeco, 585 U.S., at –––. But “if the conduct relevant to the focus occurred in a foreign country, then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in U.S. territory.” RJR Nabisco, 579 U.S., at 337; see, e.g., WesternGeco, 585 U.S., at –––; Nestlé, 593 U.S., at ––– – –––; Morrison, 561 U.S., at 266–267, 271–273.

 

In nearly all countries, including the United States, trademark law is territorial—i.e., “a trademark is recognized as having a separate existence in each sovereign territory in which it is registered or legally recognized as a mark.” 5 McCarthy §29:1, at 29–4 to 29–5. Thus, each country is empowered to grant trademark rights and police infringement within its borders. See, e.g., ibid.; Ingenohl v. Olsen & Co., 273 U.S. 541, 544 (1927); A. Bourjois & Co. v. Katzel, 260 U.S. 689, 692 (1923).

 

This principle has long been enshrined in international law. Under the Paris Convention for the Protection of Industrial Property, July 14, 1967, 21 U. S. T. 1583, T. I. A. S. No. 6923, a “mark duly registered in a country of the Union shall be regarded as independent of marks registered in other countries of the Union,” and the seizure of infringing goods is authorized “on importation” to a country “where such mark or trade name is entitled to legal protection.” Arts. 6(3), 9(1), id., at 1639, 1647.

 

Because of the territorial nature of trademarks, the “probability of incompatibility with the applicable laws of other counties is so obvious that if Congress intended such foreign application `it would have addressed the subject of conflicts with foreign laws and procedures.'” Morrison, 561 U.S., at 269.

 

Secondary Sources: McCarthy, Trademarks and Unfair Competition § 23:12, at 23–157 (5th ed. 2023).

 

 

(U.S. Supreme Court, June 29, 2023, Abitron Austria GmbH v. Hetronic Int’l, Inc., Docket No. 21-1043, 600 U.S. 412, J. Alito)

 

 

U.S. Court of Appeals for the Ninth Circuit, Radu v. Johnson Shon, Docket No. 22-16316, For Publication

Foreign Law

 

Interpretation of Foreign Law

 

Judicial Notice

 

Expert Testimony

 

Legal Research (Int’l)

 

Comity (Int’l)

 

Federal Procedure

 

 

 

(…) Federal Rules of Evidence. Fed. R. Civ. P. 44.1. Moreover, “the court is not limited by material presented by the parties; it may engage in its own research and consider any relevant material thus found.” Fed. R. Civ. P. 44.1 advisory committee’s note to 1966 amendment. That said, “expert testimony accompanied by extracts from foreign legal materials has been and will likely continue to be the basic mode of proving foreign law.” Universe Sales Co., Ltd. v. Silver Castle, Ltd., 182 F.3d 1036, 1038 (9th Cir. 1999). Courts nonetheless have an “independent obligation to adequately ascertain relevant foreign law, even if the parties’ submissions are lacking.” de Fontbrune, 838 F.3d at 997. Though international comity requires American courts to “carefully consider a foreign state’s views about the meaning of its own laws,” that deference has its limits. Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co., 138 S. Ct. 1865, 1873 (2018). “The appropriate weight in each case . . . will depend upon the circumstances; a federal court is neither bound to adopt the foreign government’s characterization nor required to ignore other relevant materials.” Id.

 

 

(…) And our de novo review of the ultimate legal conclusion ensures that foreign legal issues are treated like domestic ones.

 

 

The district court neither abused its discretion nor violated Shon’s due process rights by communicating with the State Department and, through it, the German Central Authority. “Independent judicial research” on a legal question “does not implicate the judicial notice and ex parte issues spawned by independent factual research.” de Fontbrune, 838 F.3d at 999; see also G&G Prods. LLC v. Rusic, 902 F.3d 940, 948 (9th Cir. 2018) (“formal notice” of court’s intent to research foreign law not required). Nor do the Federal Rules of Evidence and its hearsay rules apply to foreign law materials, much as legal research on domestic law cannot trigger evidentiary objections. See de Fontbrune, 838 F.3d at 999.

 

 

 

 

(U.S. Court of Appeals for the Ninth Circuit, March 13, 2023, Radu v. Johnson Shon, Docket No. 22-16316, For Publication)

 

Supreme Court of the State of Delaware, Germaninvestments AG, v. Allomet Corp., Docket No. 291, 2019

Foreign Law

Burden of Proof

Delaware Law

Saudi Arabian Law

Islamic Law

Ijtihad

Hanbali Guild

Court of Chancery Rule 44.1 provides:
A party who intends to raise an issue concerning the law of a foreign country shall give notice in his pleadings or other reasonable written notice. The Court, in determining foreign law, may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under Rule 43. The Court’s determination shall be treated as a ruling on a question of law.

This holding is consistent with decisions of the Court of Chancery and the Superior Court. See, e.g., Vichi v. Koninklijke Philips Elecs., N.V., 85 A.3d 725, 765 (Del. Ch. 2014) (“In cases where foreign law may be applicable, the party seeking the application of foreign law has the burden of not only raising the issue that foreign law applies, but also the burden of adequately proving the substance of foreign law.” (citation and internal quotation marks omitted)); see also Rep. of Pan. v. Am. Tobacco Co., 2006 WL 1933740, at *4 (Del. Super. June 23, 2006), aff’d sub nom. State of São Paulo of Federative Rep. of Braz. v. Am. Tobacco Co., 919 A.2d 1116 (Del. 2007) (“In order for the Court to consider the application of foreign law, the party seeking the application of foreign law has the burden of not only raising the issue that foreign law applies, but also the burden of adequately proving the substance of foreign law.”); 9 JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE § 44.1.04[1] (3d ed. 2006) (“The party that wishes to rely on foreign law has the responsibility of demonstrating its content.”); Jeffrey F. Ghent, Annotation, Pleading and Proof of Law of Foreign Country, 75 A.L.R.3d 177, § I.2[a] (1977) (“the courts appear to be in agreement on the general rule that the burden of proving the law of a foreign country is on the party relying on it”).

We sympathize with the trial judge as there are very few decisions from this Court that can serve as a reference in this area. Generally, the process by which foreign law is determined is necessarily context-specific, and trial judges have wide latitude in determining what evidence to consider and in what form. Even so, that latitude is not unbounded. We highlight a few decisions to discern some general guideposts.

Saudi Basic Indus. Corp. v. Mobil Yanbu Petrochemical Co. (866 A.2d 1 (Del. 2005)), a case mentioned by the Vice Chancellor, is one such case where this Court approved the process by which the trial judge ascertained the substance of the foreign law at issue. There, this Court considered whether the Superior Court had engaged in a proper methodology and analytical process to determine Saudi Arabian law. Appellant, Saudi Basic Industries Corporation (“SABIC”) argued that the trial court, although purporting to employ the methodology that a Saudi judge would follow to determine the applicable Saudi law, ijtihad, in fact invoked ijtihad merely as an after-the-fact rationalization for foreign law rulings that were essentially arbitrary and unprincipled.

This Court rejected those contentions because the record clearly established that the trial judge “went to extraordinary lengths to understand the applicable Saudi law and to make rulings that were consistent with the numerous Saudi law sources presented to her.” We found that the trial judge was keenly mindful of key distinctive features of Saudi law and the problems that it created for defining the elements of, and remedies for, ghasb (usurpation) and how to instruct the jury on these issues. As an example of such distinctive features, Islamic law does not embrace the common law system of binding precedent and stare decisis. In Saudi Arabia, judicial decisions are not in themselves a source of law, and with minor exceptions, court decisions in Saudi Arabia are not published or even open to public inspection. Instead of relying upon statutes or decisional precedent to discern the applicable law, Saudi judges use scholarly treatises as guides to identify a spectrum of possibilities on a given question, as opposed to a single correct answer. Thus, the critical inquiry was whether the proper analytical procedures (or ijtihad) were followed in reaching the results.

We found that the trial judge properly recognized the proper analytical procedures in reaching the result. 76 The trial judge made “exceptional efforts to ensure that she was fully informed of the Hanbali teachings upon which to ground her legal rulings.”77 Before trial, the parties presented the trial judge with seven reports from four Saudi law experts (two from each side), as well as each expert’s lengthy deposition. Perceiving a conflict in the experts’ opinions, the trial judge retained an independent expert and obtained his advice on the critical issues. This expert prepared an initial report, a supplemental report, and was deposed for a full day. After reviewing nine reports and over one thousand pages of deposition testimony, the trial judge held a day-long pre-trial hearing to permit the parties to present live testimony of the independent expert, among others. The court considered two additional reports post- trial. On that record, this Court concluded that there was no basis for SABIC to contend that the trial court’s analytical process was arbitrary, unprincipled, or lawless.


76 For example, the trial judge stated that “when faced with the daunting task of determining the elements of ghasb and the damages available for this tort, the Court, weighing the credibility of each Saudi law expert, exercised, as best it could under the circumstances, ijtihad, to reach the ‘right’ result.” Id. at 31. 

77 Id. at 31. The Hanbali is an Islamic law guild or school of thought. “In Saudi Arabia, the judges are instructed to rule exclusively in accordance with the teaching of the Hanbali guild.” Id. at 30.

(Supreme Court of the State of Delaware, January 27, 2020, Germaninvestments AG, v. Allomet Corp., Docket No. 291, 2019)

Supreme Court of the State of Delaware, Germaninvestments AG, v. Allomet Corp., Docket No. 291, 2019

Forum Selection Clause

Mandatory Forum Selection Clause

Permissive Forum Selection Clause

Conflict of Laws

Contract Drafting

Brussels Regulation on Jurisdiction, Recognition and Enforcement

Information on Foreign Law to Be Provided, Burden of Proof

Delaware Law

(…) See Nat’l Indus. Grp. (Hldg.) v. Carlyle Inv. Mgmt. L.L.C., 67 A.3d 373, 387 (Del. 2013) (“The enforcement of an international forum selection clause is not an issue of comity. It is a matter of contract enforcement and giving effect to substantive rights that the parties have agreed upon.”).

In this case, we consider whether the Court of Chancery correctly determined that a provision in a Restructuring and Loan Agreement between the parties (the “R&L Agreement”) is a mandatory, as opposed to a permissive, forum selection clause. That clause reads: “The agreement is subject to Austrian law. The place of jurisdiction is Vienna.” The Court of Chancery held that Austrian law governs the analysis of the forum selection provision, and determined that the provision is governed by Article 25 of the European Regulation on Jurisdiction and Recognition and Enforcement of Judgments in Civil and Commercial Matters (the “Brussels Regulation”). Applying Article 25 of the Brussels Regulation, it held that the forum selection clause was mandatory. Based upon these conclusions, the court granted Defendants’ Rule 12(b)(3) motion to dismiss, without prejudice, in favor of the Vienna, Austria forum.

We hold that the Appellees, who raised Austrian law as a basis for their motion to dismiss, had the burden of establishing the substance of Austrian law. We further hold that, given the complexity of the foreign law issues raised and the absence of any focused and orderly engagement by the parties on these issues, the Court of Chancery erred in determining that Appellees had carried that burden. Accordingly, we hold that, given the Appellees’ failure of proof, the forum selection provision analysis should proceed exclusively under Delaware law.

Applying Delaware law, the forum selection provision is merely permissive, not mandatory. As such, the forum selection provision is no bar to the litigation proceeding in Delaware. We affirm the Court of Chancery’s holding that 8 Del. C. § 168 was not the proper mechanism for the relief Appellants seek. Therefore, this matter is AFFIRMED in part, REVERSED in part, and REMANDED to the Court of Chancery for further proceedings in accordance with this opinion.

Appellant, Plaintiff-below, Germaninvestments Aktiengesellschaft (AG) (“Germaninvestments”) is a Swiss holding company formed to manage assets for the Herrling family.

Allomet Corporation (“Allomet”), is a Delaware corporation founded in 1998 with its headquarters in North Huntingdon Township, Pennsylvania. It manufactures high-performance, tough-coated metal powders using a proprietary technology for coating industrial products. Non-party, Fobio Enterprises, Ltd. (“Fobio”), a Hong Kong limited company, initially owned 52,249 of Allomet’s 54,132 outstanding shares of common stock and all of its 1,304 shares of preferred stock. In April 2016, Fobio acquired the remaining 1,883 shares of Allomet’s common stock, previously held by the Estate of Richard E. Toth.

Non-party, AHMR GmbH (“AHMR”), an Austrian limited company, was formed solely for the purpose of holding all of the equity interest in Allomet and Yanchep, Allomet’s intellectual property, and Yanchep’s assets. Non-party, Hereth, a citizen of Switzerland, owns 100% of Fobio through various entities. Hereth is also a director and the Chairman of the Board of Directors of Allomet.

On May 29, 2017, a draft of what was to become the R&L Agreement was circulated among the various parties. The express purpose of the R&L Agreement was “to regulate the funding of the Allomet Corporation until the establishment, under Austrian law, of a holding company in which [Herrling] and [Hereth] shall acquire a 50% stake and which shall later hold all of the shares (100%) of the Allomet Corporation.” The R&L Agreement memorialized the terms of the loans Herrling had extended to Allomet, the potential framework for continued discussions concerning a potential Austrian-based joint venture, and the funding each party was expected to contribute to the joint venture.

As noted above, the R&L Agreement states: “The agreement is subject to Austrian law. The place of jurisdiction is Vienna.” We refer to this provision as the “Forum Clause.”

The parties formed the Austrian holding company contemplated by the R&L Agreement, AHMR, on July 3, 2017. AHMR was registered with the commercial register of the commercial court in Vienna, Austria the following month.

The Proceedings in the Court of Chancery
Appellants filed their Verified Complaint on September 7, 2018, alleging three counts. Count I seeks to enforce the R&L Agreement and related agreements invoking 8 Del. C. § 168 to require Allomet to “reissue” its stock certificates in AHMR’s name as contemplated by the R&L Agreement and SPA. Count II alleges breach of the R&L Agreement and related agreements and seeks specific performance of those agreements. Count III alleges unjust enrichment as a result of Appellees’ failure to transfer all of Allomet’s outstanding stock, Allomet’s intellectual property, and Yanchep’s membership units and real property to AHMR as agreed in the R&L Agreement.

Appellees moved to dismiss the action on December 16, 2018, primarily arguing that the court should grant the motion so that the parties may litigate these claims in Vienna, Austria. Appellees provided scant information to the Court of Chancery on Austrian law in their opening brief in support of their motion to dismiss. They cited to and attached Article 25 of the Brussels Regulation, but cited no cases in support of their 12(b)(3) motion on the substance of Austrian law. Nor did they cite any secondary sources of information or proffer any expert testimony.

(…) During the oral argument on Appellees’ motion to dismiss, the Vice Chancellor expressed some obvious discomfort with the state of the record on the foreign law issues.

(…) As more fully explained below, we affirm the Vice Chancellor’s decision to apply Austrian law in its analysis of the Forum Clause because Austrian law bears a material relationship to the transactions at issue. But the court erred in determining that Appellees satisfied their burden of proof in establishing foreign law. As a result of Appellees’ failure to carry their burden, we hold that the Court of Chancery should apply the law of the forum (Delaware law) in analyzing the Forum Clause. Applying Delaware law to the Forum Clause, the provision is clearly permissive, not mandatory. Accordingly, we hold that the Forum Clause is no bar to the matter proceeding in Delaware.

“When a contract contains a forum selection clause, this court will interpret the forum selection clause in accordance with the law chosen to govern the contract.” Choice of law provisions control so long as the jurisdiction selected bears some material relationship to the transaction. This Court has stated that a material relationship exists where a party’s principal place of business is located within a foreign jurisdiction, a majority of the activity underlying the action occurred within the foreign jurisdiction, and where parties to a contract performed most of their services in the foreign state. However, a foreign jurisdiction’s laws may not be used to interpret a contractual provision “in a manner repugnant to the public policy of Delaware.”

The facts alleged here involve connections to several jurisdictions. Allomet is a Delaware corporation with headquarters in Pennsylvania. Yanchep is a Delaware LLC with assets in Pennsylvania. The stock at issue is located in Delaware by operation of 8 Del. C. § 169. Germaninvestments is a Swiss company, with headquarters in Switzerland. Herrling is domiciled in Switzerland. Hereth is a citizen of Switzerland. Fobio is a Hong Kong limited company. The parties executed the R&L Agreement in Switzerland, and Plaintiffs allege that all negotiations occurred in Switzerland, other parts of Europe, or Pennsylvania. The R&L Agreement, a focal point of Plaintiffs’ Complaint, contains the Forum Clause and selects Austrian law as the governing law. The SPA and MIPA, which relate to the purchase of Delaware equity, are governed by Delaware law. Non-party AHMR was formed in Austria. The safe-deposit box containing the Delaware certificates is physically located in Austria.

(…) We agree with the Court of Chancery’s determination that the connection to Austria is sufficiently material so as to require the analysis of the Forum Clause to be examined under Austrian law.

(…) Typically, the movant will submit enough ‘relevant material’ to the Court to sufficiently establish the content of foreign law. But that did not happen here. Appellees, as movants, supplied only the text of Article 25 of the Brussels Regulation. They cited no cases, commentaries, or other authorities, and proffered no expert testimony. They offered academic support in the form of secondary sources, but only in their reply papers after Appellants had responded to their motion. Thus, Appellants had no real or meaningful opportunity to respond to these authorities prior to the court’s ruling.

(…) The failure to identify, early on, and properly join the issues, coupled with the lack of any expert input on the numerous nuances of Austrian and European law that were ultimately raised, leads us to conclude that the Court of Chancery erred in determining that Appellees had satisfied their burden of proof.

(…) As the Court of Chancery correctly observed, “under Delaware law, if the forum selection provision does not state that it is exclusive in crystalline terms, our courts will construe the provision as permissive.” Thus, under Delaware law, the Forum Clause is merely permissive, not mandatory. Accordingly, we hold that the Forum Clause presents no bar to the litigation proceeding in Delaware.

(…) See, e.g., In re Avantel, S.A., 343 F.3d 311, 322 (5th Cir. 2003) (affirming lower court’s application of the “well-settled principle” that when the parties fail to conclusively establish foreign law, a court is entitled to look to its own forum’s law).

(Supreme Court of the State of Delaware, January 27, 2020, Germaninvestments AG, v. Allomet Corp., Docket No. 291, 2019)

Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co., Docket No. 16-1220

Conflict of laws: Foreign law: Antitrust: Export: Act of state doctrine: Foreign sovereign compulsion doctrine: Comity (international): Common law:

When foreign law is relevant to a case instituted in a federal court, and the foreign government whose law is in contention submits an official statement on the meaning and interpretation of its domestic law, may the federal court look beyond that official statement? The Court of Appeals for the Second Circuit answered generally “no,” ruling that federal courts are “bound to defer” to a foreign government’s construction of its own law, whenever that construction is “reasonable.” In re Vitamin C Antitrust Litigation, 837 F. 3d 175, 189 (2016).

We hold otherwise. A federal court should accord respectful consideration to a foreign government’s submission, but is not bound to accord conclusive effect to the foreign government’s statements. Instead, Federal Rule of Civil Procedure 44.1 instructs that, in determining foreign law, “the court may consider any relevant material or source . . . whether or not submitted by a party.” As “the court’s determination must be treated as a ruling on a question of law,” Fed. Rule Civ. Proc. 44.1, the court “may engage in its own research and consider any relevant material thus found,” Advisory Committee’s 1966 Note on Fed. Rule Civ. Proc. 44.1, 28 U. S. C. App., p. 892. Because the Second Circuit ordered dismissal of this case on the ground that the foreign government’s statements could not be gainsaid, we vacate that court’s judgment and remand the case for further consideration.

Petitioners, U. S.-based purchasers of vitamin C, filed a class-action suit against four Chinese corporations that manufacture and export the nutrient. The U. S. purchasers alleged that the Chinese sellers, two of whom are respondents here, had agreed to fix the price and quantity of vitamin C exported to the United States from China, in violation of §1 of the Sherman Act, 15 U. S. C. §1. More particularly, the U. S. purchasers stated that the Chinese sellers had formed a cartel “facilitated by the efforts of their trade association,” the Chamber of Commerce of Medicines and Health Products Importers and Exporters. Complaint in No. 1:05–CV–453, Docket No. 1, ¶43. The Judicial Panel on Multidistrict Litigation consolidated the instant case and related suits for pretrial proceedings in the United States District Court for the Eastern District of New York.

The Chinese sellers moved to dismiss the U. S. purchasers’ complaint on the ground that Chinese law required them to fix the price and quantity of vitamin C exports. Therefore, the Chinese sellers urged, they are shielded from liability under U. S. antitrust law by the act of state doctrine, the foreign sovereign compulsion doctrine, and principles of international comity.

At common law, the content of foreign law relevant to a dispute was treated “as a question of fact.” Miller, Federal Rule 44.1 and the “Fact” Approach to Determining Foreign Law: Death Knell for a Die-Hard Doctrine, 65 Mich. L. Rev. 613, 617–619 (1967). In 1801, this Court endorsed the common-law rule, instructing that “the laws of a foreign nation” must be “proved as facts.” Talbot v. Seeman, 1 Cranch 1, 38 (1801); see, e.g., Church v. Hubbart, 2 Cranch 187, 236 (1804).

Federal Rule of Civil Procedure 44.1, adopted in 1966, fundamentally changed the mode of determining foreign law in federal courts. The Rule specifies that a court’s determination of foreign law “must be treated as a ruling on a question of law,” rather than as a finding of fact. (…) (Federal Rule of Criminal Procedure 26.1 establishes “substantially the same” rule for criminal cases. Advisory Committee’s 1966 Note on Fed. Rule Crim. Proc. 26.1, 18 U. S. C. App., p. 709).

(…) In the spirit of “international comity,” Société Nationale Industrielle Aérospatiale v. United States Dist. Court for Southern Dist. of Iowa, 482 U. S. 522, 543, and n. 27 (1987), a federal court should carefully consider a foreign state’s views about the meaning of its own laws. (…) But the appropriate weight in each case will depend upon the circumstances; a federal court is neither bound to adopt the foreign government’s characterization nor required to ignore other relevant materials. When a foreign government makes conflicting statements, or, as here, offers an account in the context of litigation, there may be cause for caution in evaluating the foreign government’s submission. Given the world’s many and diverse legal systems, and the range of circumstances in which a foreign government’s views may be presented, no single formula or rule will fit all cases in which a foreign government describes its own law. Relevant considerations include the statement’s clarity, thoroughness, and support; its context and purpose; the transparency of the foreign legal system; the role and authority of the entity or official offering the statement; and the statement’s consistency with the foreign government’s past positions.

(…) The Court of Appeals additionally mischaracterized the Ministry’s brief as a “sworn evidentiary proffer.” 837 F. 3d, at 189. In so describing the Ministry’s submission, the Court of Appeals overlooked that a court’s resolution of an issue of foreign law “must be treated as a ruling on a question of law.” Fed. Rule Civ. Proc. 44.1. The Ministry’s brief, while a probative source for resolving the legal question at hand, was not an attestation to facts.

The understanding that a government’s expressed view of its own law is ordinarily entitled to substantial but not conclusive weight is also consistent with two international treaties that establish formal mechanisms by which one government may obtain from another an official statement characterizing its laws. Those treaties specify that “the information given in the reply shall not bind the judicial authority from which the request emanated.” European Convention on Information on Foreign Law, Art. 8, June 7, 1968, 720 U. N. T. S. 154; see Inter-American Convention on Proof of and Information on Foreign Law, Art. 6, May 8, 1979, O. A. S. T. S. 1439 U. N. T. S. 111 (similar). Although the United States is not a party to those treaties, they reflect an international practice inconsistent with the Court of Appeals’ “binding, if reasonable” resolution.

Secondary sources: Miller, Federal Rule 44.1 and the “Fact” Approach to Determining Foreign Law: Death Knell for a Die-Hard Doctrine, 65 Mich. L. Rev. 613, 617–619 (1967); C. Wright & A. Miller, Federal Practice and Procedure §2441, p. 324 (3d ed. 2008).

(U.S.S.C., June 14, 2018, Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co., Docket No. 16-1220, J. Ginsburg, unanimous)

En l’espèce, des acheteurs U.S. de vitamine C ont déposé une « class action » contre quatre entreprises chinoises qui la fabrique et l’exporte.

Quand une cour fédérale doit considérer un droit étranger et que le gouvernement étranger émet une déclaration officielle exposant le sens et l’interprétation de ce droit, la cour fédérale se doit de prendre en compte dite déclaration, mais n’est pas tenue de la suivre, en application de la Règle 44.1 de procédure civile fédérale. En pratique, pour déterminer le contenu du droit étranger, la cour peut entreprendre sa propre recherche et s’inspirer de toutes sources utiles.

Les importateurs, demandeurs à l’action de classe, allèguent que les entreprises chinoises venderesses se sont entendues pour fixer les prix de vente et les quantités, en violation de la §1 du Sherman Act (15 U.S.C. §1). Les entreprises défenderesses soutiennent que le droit chinois leur impose de fixer le prix de la vitamine C et les quantités exportées. De la sorte, invoquent-elles, elles seraient protégées par le droit U.S. de l’antitrust, par l’« act of state doctrine », par la « foreign sovereign compulsion doctrine » et par les principes de l’ « international comity ».

Sous le régime de la Common law, la détermination du contenu du droit étranger était traitée comme une question de fait, et non de droit. La Cour a repris sur ce point la Common law par une décision de 1801.

Ce régime a été fondamentalement modifié par la Règle 44.1 de procédure civile fédérale (et par la Règle 26.1 de procédure pénale fédérale) : la détermination du droit étranger se traite désormais comme une question de droit.

L’essence de l’ « international comity » impose à une cour fédérale de considérer avec soin les vues d’un état étranger au sujet de son propre droit. Mais le poids à donner à ces vues dépend des circonstances du cas d’espèce. Une cour fédérale n’est pas tenue de se conformer à ces vues, et n’est pas tenue non plus d’ignorer d’autres sources permettant d’appréhender le contenu du droit étranger. Ainsi, quand un gouvernement étranger émet des opinions contradictoires ou, comme ici, s’exprime dans le contexte d’une procédure judiciaire, il se peut que l’avis du gouvernement étranger doive être apprécié avec retenue. En pratique, l’avis du gouvernement étranger doit être analysé sous l’angle de sa clarté, de sa rigueur, de sa motivation, de son contexte, de son but, de la transparence du système juridique étranger, du rôle et de l’autorité de l’entité gouvernementale qui s’est exprimée, et de sa consistance avec les prises de position passées dudit gouvernement étranger.

(L’autorité inférieure, à tort, a caractérisé la déclaration du gouvernement étranger comme une attestation officielle donnée sous serment).

Les Etats-Unis ne sont pas parties aux deux traités suivants : European Convention on Information on Foreign Law, Inter-American Convention on Proof of and Information on Foreign Law. Cependant, la Cour observe que la Règle 44.1 est conforme à ces deux traités.